United States Court of AppealsFor the First Circuit

No. 08-1248

IMS HEALTH INCORPORATED, VERISPAN, LLC, and SOURCE HEALTHCAREANALYTICS, INC., a subsidiary of WOLTERS KLUWER HEALTH, INC.,

Plaintiffs, Appellees,

v.

JANET T. MILLS, as Attorney General for the State of Maine,

Defendant, Appellant.

ON APPEAL FROM THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MAINE

[Hon. John A. Woodcock, Jr., U.S. District Judge]

Before

Lynch, Chief Judge,Lipez and Howard, Circuit Judges.

Thomas A. Knowlton, Assistant Attorney General, with whomJanet T. Mills, Attorney General of the State of Maine, Paul Stern,Deputy Attorney General, Nancy Macirowski, Assistant AttorneyGeneral, and Thomas C. Bradley, Assistant Attorney General, were onbrief for appellants.

Thomas C. Goldstein, with whom Thomas R. Julin, Jamie Z.Isani, Patricia Acosta, Hunton & Williams LLP, Jack H. Montgomery,Bernstein, Shur, Sawyer & Nelson, P.A., Mark A. Ash, and SmithAnderson Blount Dorsett Mitchell & Jernigan LLP, were on brief forappellees.

August 4, 2010

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LYNCH, Chief Judge. This case involves constitutional

challenges to a Maine statute enacted to reduce health care costs

and protect prescribers' data privacy. In Maine and elsewhere,

each time a prescription from a physician or other licensed

prescriber is given to a pharmacy, the pharmacy obtains a number of

facts that identify the prescriber. Data put together from

multiple transactions involving the same prescriber reveal certain

patterns and preferences, including her prescribing history, her

choice of particular brand-name drugs versus their generic

equivalents, and the likelihood she will adopt new brand-name

drugs.

Plaintiffs challenge the constitutionality of 22 Me. Rev.

Stat. Ann. tit. 22, § 1711-E(2-A), which allows prescribers

licensed in Maine to choose not to make this identifying

information available for use in marketing prescription drugs to

them. Section 1711-E(2-A) does not directly prohibit any marketing

practices. Rather, it prohibits certain entities from licensing,

using, selling, transferring, or exchanging this information for a

marketing purpose if the prescriber has opted to protect the

confidentiality of her prescribing data. Me. Rev. Stat. Ann. tit.

22, § 1711-E(2-A).

Plaintiffs, companies that collect vast amounts of

identifying data about individual prescribers and aggregate the

data into reports and databases for use when marketing

The district court also enjoined Maine from enforcing1

parts of section 1711-E implementing section 1171-E(2-A). SeeRowe, 532 F. Supp. 2d at 183.

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pharmaceutical products, are covered in the text of the law, as are

others. See id. § 1711-E(1)(A)(I). Immediately after section

1711-E(2-A)'s enactment in 2008, and before its enforcement,

plaintiffs sued Maine's attorney general in the federal district

court of Maine under 42 U.S.C. § 1983, claiming that section 1711-

E(2-A)'s restrictions on the licensing, use, sale, transfer, or

exchange of Maine prescribers' identifying data for a marketing

purpose are unconstitutional limitations on protected speech under

the First Amendment; that these restrictions are unconstitutionally

vague and overbroad under the First and Fourteenth Amendments; and

that the law also regulates transactions outside of Maine in

violation of the dormant Commerce Clause. On December 21, 2007,

the district court granted plaintiffs a preliminary injunction and

prohibited Maine from enforcing section 1711-E(2-A) on the basis of

plaintiffs' First Amendment claims. See IMS Health Corp. v. Rowe,

532 F. Supp. 2d 153, 183 (D. Me. 2007).1

This case comes to us in an unusual posture. Maine is

not the only state to have restricted plaintiffs' use of

prescriber-identifying data, and this is not the first time

plaintiffs have made these constitutional claims. On November 18,

2008, after the district court granted plaintiffs a preliminary

injunction in this case, this court upheld a similar, but not

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identical, New Hampshire statute against plaintiffs' constitutional

challenges, a ruling that binds this panel. See IMS Health Inc. v.

Ayotte, 550 F.3d 42 (1st Cir. 2008), cert. denied, 129 S. Ct. 2864

(2009). In the meantime, the district court's injunction has

remained in effect during this appeal, and Maine has never

implemented section 1711-E(2-A).

We reject all of plaintiffs' constitutional challenges to

section 1711-E(2-A). Plaintiffs' First Amendment challenges fail

for the reasons stated in Ayotte: the statute regulates conduct,

not speech, and even if it regulates commercial speech, that

regulation satisfies constitutional standards. They also fail for

reasons not present in Ayotte. The Maine statute constitutionally

protects Maine prescribers' choice to opt in to confidentiality

protection to avoid being subjected to unwanted solicitations based

on their identifying data. We also reject the argument that the

statute is void for vagueness.

Plaintiffs' argument that section 1711-E(2-A) is

unconstitutional under the dormant Commerce Clause if applied to

plaintiffs' out-of-state use or sale of opted-in Maine prescribers'

identifying data also fails. We interpret the Maine statute using

Maine's principles of statutory construction and hold that section

1711-E(2-A) regulates prescription drug information intermediaries'

out-of-state use or sale of opted-in Maine prescribers' data. We

hold that this interpretation does not raise constitutional

These facts rely in part on this court's discussion of2

the same industry, and plaintiffs' role in that industry, in our2008 Ayotte opinion. The parties have relied heavily on thosefacts and the record from Ayotte.

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concerns under the dormant Commerce Clause, which might necessitate

a narrower reading of the statute under the doctrine of

constitutional avoidance.

The Supreme Court's current dormant Commerce Clause

jurisprudence does not leave Maine powerless to protect Maine

prescribers who have sought to prevent the use of their identifying

data in transactions that also cause substantial in-state harms,

including increased health care costs. The statute

constitutionally reaches plaintiffs' out-of-state transactions as

a necessary incident of Maine's strong interest in protecting

opted-in Maine prescribers from unwanted solicitations, a policy

that Maine also rationally believes will lower its health care

costs. Nor, we hold, would section 1711-E(2-A)'s regulation of

prescription drug information intermediaries' out-of-state use or

sale of opted-in Maine prescribers' identifying data raise

constitutional concerns as a disproportionate burden on interstate

commerce under Pike v. Bruce Church, Inc., 397 U.S. 137 (1970).

I. Factual Background

The relevant facts are undisputed. 2

Prescriber-identifying data is used for many purposes,

but this case concerns restrictions on only one of those uses:

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pharmaceutical manufacturers' use of the data to send their

pharmaceutical sales representatives to personally market

particular drugs to particular prescribers, a practice known as

"detailing." Section 1711-E defines "detailing" as "one-to-one

contact with a prescriber or employees or agents of a prescriber

for the purpose of increasing or reinforcing the prescribing of a

certain drug by the prescriber." Me. Rev. Stat. Ann. tit. 22,

§ 1711-E(1)(A-2).

Detailing is a massive and expensive undertaking for

pharmaceutical manufacturers, which spend billions of dollars a

year to have some 90,000 pharmaceutical sales representatives make

weekly or monthly one-on-one visits to prescribers nationwide.

Stephanie Saul, Doctors Object as Drug Makers Learn Who's

Prescribing What, N.Y. Times, May 4, 2006, at A1. Each

pharmaceutical manufacturer's detailers market particular

pharmaceutical products in particular regions. A single prescriber

is visited by an average of twenty-eight detailers a week; an

average of fourteen detailers a week call on a single specialist.

Prescriber-identifying data is a valuable tool in a

detailer's arsenal of sales techniques. With it, pharmaceutical

manufacturers can pinpoint the prescribing habits of individual

prescribers in a region and target prescribers who might be

When Merck marketed Vioxx, for example, it used a wealth3

of prescriber-identifying data to create monthly reports onindividual prescribers in each detailer's assigned territory. Thereports showed how many Merck versus non-Merck drugs the prescriberprescribed and estimated how many of these prescriptions could besubstituted for Merck products. Merck then tracked its detailers'progress in converting prescribers in their territories to theMerck brand and gave detailers bonuses based on Merck's salesvolume and market share in the detailer's territory.

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persuaded to switch brands or prescribe more of a detailer's brand

of products. See Saul, supra, at A1. 3

During their one-on-one visits to prescribers, detailers

distribute upwards of $1 million worth of free product samples per

year, along with branded promotional materials and pamphlets about

the different conditions their particular products can be used to

treat. Detailers use prescriber-identifying data to do these

things more effectively; every sales pitch can be tailored to what

the detailer knows of the prescriber based on her prescribing

history. The central objective is to get prescribers to adopt the

pharmaceutical product the detailer is marketing and to build brand

loyalty. This goal is not only explicit; it is how detailers earn

bonuses. See Saul, supra, at A1.

Some prescribers, in Maine and elsewhere, welcome these

interactions. Detailers, they say, provide them with studies

relevant to their practices, useful free samples, and targeted data

about how widely certain new drugs have been prescribed by others.

They find that detailers provide helpful comparisons of competing

drugs used to treat the same conditions and information about new

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drugs or more effective alternatives to the prescriptions they

currently prescribe. These prescribers say they are immune to

detailers' influence and see no conflict of interest.

Significantly, though, other prescribers have strenuously

objected that detailing intrudes into their prescribing decisions.

Detailers, these prescribers insist, should not be able to use

their prescribing histories to target them for unwelcome marketing

calls. An article by a senior vice president of the American

Medical Association (AMA) and an executive of plaintiff IMS Health

noted that physicians "complain bitterly" about detailers "who wave

data in their faces" and challenge them with their own prescribing

histories when they fail to prescribe more of the product the

detailer has been advertising. R. A. Musacchio & R. J. Hunkler,

More Than a Game of Keep-Away, Pharmaceutical Executive, May 2006.

The head of California's state medical association has reported

that prescribers have been "outraged that people came into their

office and talked to them about how many times they prescribed a

particular drug." Saul, supra, at A1. Aggregated survey data

confirms that physicians have a predominantly negative view of

detailing. See P. Manchanda & E. Honka, The Effects and Role of

Direct-to-Physician Marketing in the Pharmaceutical Industry: An

Integrative Review, 5 Yale J. Health Pol'y L. & Ethics 785, 788-91

(2005).

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Many Maine prescribers have openly objected to detailing.

A survey by the Maine Medical Association in 2006 revealed that a

majority of Maine physicians did not want pharmaceutical

manufacturers to be able to use their individual prescribing

histories for marketing purposes. One Maine prescriber explained

that she felt that "it intrudes upon my privacy and my work life

for drug companies to buy my information, without my permission,

for marketing purposes." She has "ask[ed] to be removed from

mailing lists and telephone call lists" and "would like to have the

similar option of not allowing my professional information to be

sold to drug companies for marketing purposes."

Detailers' use of prescriber-identifying data, however,

is only the final step in a series of transactions that begin with

the acquisition and aggregation of massive amounts of individual

prescribers' identifying data. Pharmaceutical manufacturers lack

direct access to prescriber-identifying data. That fact has fueled

an enormously profitable, multilayered market for acquiring,

aggregating, packaging, and selling these data primarily for

detailing. Plaintiffs are the middlemen of this market.

When filling prescriptions, individual pharmacies

accumulate data about the prescriptions individual prescribers have

made, usually for insurance reimbursement. Pharmacies that are

part of national chains normally transfer these data to the chain's

central data warehouse. Each pharmacy, and even each pharmacy

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chain, is only one piece of a bigger picture; individual

prescribers, or their patients, may make prescriptions at many

different pharmacy locations.

This is where plaintiffs come in. Plaintiff companies

are prescription drug information intermediaries that mine

specialized data. They contract with numerous pharmacies and, to

a lesser degree, insurance companies and other carriers, to buy

their raw data. Under those contracts, the pharmacy's computer

software collects data it sends to plaintiffs. The software

encrypts patient-identifying data so that plaintiffs cannot

identify individual patients by name, but it captures information

directly identifying prescribers by name and address and shows

details about the particular drugs prescribed.

Plaintiffs receive and aggregate data from these various

sources and then compile reports and databases. They assemble a

complete picture of individual prescribers' prescribing histories

by cross-referencing prescriber names with publicly available

databases, including the AMA's database of medical doctors'

specialties. See Saul, supra, at A1. Plaintiffs admit that most

of their reports and databases are destined--and designed--for

pharmaceutical manufacturers to instruct detailers where to focus

Plaintiffs also sell or license other databases and4

reports to other clients, including governments, nonprofitorganizations, and research institutions.

Pharmaceutical manufacturers may also use plaintiffs'5

data for other purposes, like to send out alerts about particulardrugs to prescribers who have been prescribing it or for researchand development.

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their efforts, identify which prescribers to target, and assess

detailers' effectiveness. 4

Plaintiffs then license or sell these specialized

databases and reports to pharmaceutical manufacturers, a lucrative

business that yielded revenues of $1.75 billion for plaintiff IMS

Health alone in 2005. Id. Plaintiffs' products are the building5

blocks of the reports pharmaceutical manufacturers generate for

individual detailers, who use them to target prescribers in their

assigned areas.

II. The Maine Law

To date, Maine appears to be one of only three states

that have limited detailers' access to prescribers' identifying

data. See Me. Rev. Stat. Ann. tit. 22, § 1711-E(2-A); N.H. Rev.

Stat. Ann. § 318:47-f; Vt. Stat. Ann. tit. 18, § 4631(d). Like its

counterparts in New Hampshire and Vermont, the Maine law, section

1711-E(2-A), does so indirectly: in relevant part, it states that

"a carrier, pharmacy or prescription drug information

intermediary," as defined in the statute, "may not license, use,

sell, transfer or exchange for value, for any marketing purpose,

"Marketing" includes "[a]dvertising, publicizing,6

promoting or selling a prescription drug;" "activities undertakenfor the purpose of influencing the market share of a prescriptiondrug or the prescribing patterns of a prescriber, a detailing visitor a personal appearance;" "[a]ctivities undertaken to evaluate orimprove the effectiveness of a professional detailing sales force;"or "[a] brochure, media advertisement or announcement, poster orfree sample of a prescription drug." Id. § 1711-E(1)(F-1).

"'Marketing' does not include pharmacy reimbursement,formulary compliance, pharmacy file transfers in response to apatient request or as a result of the sale or purchase of apharmacy, patient care management, utilization review by a healthcare provider or agent of a health care provider or the patient'shealth plan or an agent of the patient's health plan, and healthcare research." Id.

This circuit upheld New Hampshire's statute, which7

categorically prohibits certain entities, including plaintiffs,from licensing, transferring, using, or selling any prescriber-identifying data for a commercial purpose. N.H. Rev. Stat. Ann.§ 318:47-f; Ayotte, 550 F.3d at 47. The Vermont statute insteadprohibits certain entities from selling, licensing, exchanging, orpermitting the use of records containing prescriber-identifyingdata when marketing or promoting prescription drugs unless theprescriber has affirmatively consented to such uses. See Vt. Stat.Ann. tit. 18, § 4631(d); IMS Health Inc. v. Sorrell, 631 F. Supp.2d 434, 443-44 (D. Vt. 2009).

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prescription drug information that identifies a prescriber who has

filed for confidentiality protection." Me. Rev. Stat. Ann. tit.6

22, § 1711-E(2-A). Maine's law regulates the different layers of

the market for prescriber-identifying information, but it does not

prohibit detailing, nor does it purport to prohibit speech by

detailers to prescribers.

Unlike similar laws in New Hampshire and Vermont, the

central feature of the Maine law is to limit detailers' access to

an individual prescriber's identifying data only if the prescriber

has affirmatively opted for this protection. See id. 7

The Maine law contains a separate provision protecting8

patient-identifiable data, which plaintiffs do not challenge. SeeMe. Rev. Stat. Ann. tit. 22, § 1711-E(2).

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A "prescriber" is "a person who is licensed, registered

or otherwise authorized in the appropriate jurisdiction to

prescribe and administer drugs in the course of professional

practice." Me. Rev. Stat. Ann. tit. 22, § 1711-E(1)(G-1). As

other sections of § 1711-E make clear, the "appropriate

jurisdiction" means prescribers licensed and located in Maine: the

provision is designed to protect only "prescribers in the health

care system of this state." Id. § 1711-E(1-B). Only these Maine

prescribers can opt in, and even opted-in prescribers' identifying

data can be used for any purpose other than detailing. See id.

Maine enacted section 1711-E(2-A) to achieve three stated

"compelling state interests: to improve the public health, to limit

annual increases in the cost of health care and to protect the

privacy of . . . prescribers in the health care system of this

State." Id. § 1711-E(1-A). The Maine legislature found that8

"[p]atients and prescribers have requested that the legislature

provide a mechanism for protecting the confidentiality of

identifying prescription drug information from use for marketing

purposes." Id. § 1711-E(1-A)(B). "Across the nation," the

legislature further found, "data companies purchase for marketing

purposes computerized prescription drug records from pharmacies and

insurers that identify prescribers," and they sell these records

Plaintiffs' fleeting assertion that section 1711-E's9

definition of a "prescriber" encompasses any prescriber anywhere isflatly contradicted by section 1711-E's statement of purpose, whichstates that the statutes' goals include "to protect the privacy of. . . prescribers in the health care system of this State." Me.Rev. Stat. Ann. tit. 22, § 1711-E(1-B).

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"to prescription drug manufacturers that use personally identifying

prescriber information to attempt to influence prescribers to

prescribe higher priced drugs," resulting in higher health care

costs. Id. § 1711-E(1-A)(C). "Restricting the use of prescriber

identifying information," the Maine legislature found, "will act to

decrease drug detailing that targets the prescriber, thus

increasing decisions to prescribe lower priced drugs and decisions

made on the basis of medical and scientific knowledge and driving

down the cost of health care." Id. § 1711-E(1-A)(D).

Section 1711-E(2-A) operates as follows. In its first

step, Maine prescribers who object to being targeted by

pharmaceutical detailers may register for confidentiality

protection. See Me. Rev. Stat. Ann. tit. 22, § 1711-E(4). Maine9

prescribers can opt in for confidentiality protection in

application materials with the relevant Maine licensing board. Id.

§ 1711-E(4)(A). Those materials must inform Maine prescribers that

"prescription drug information that identifies the prescriber is

used for marketing purposes by carriers, pharmacies and

prescription drug information intermediaries" and must give

prescribers the option of protecting the confidentiality of their

Those methods are (1) by signing and submitting an10

enclosed form to the Maine Health Data Organization; (2) bymanually or electronically checking a box on the form; or (3) bylinking to the Maine Health Data Organization website and fillingout an electronic form. Id. § 1711-E(4)(A)(1).

The Maine Health Data Organization maintains a health11

information database to benefit Maine citizens and develops datacollection policies. Me. Rev. Stat. Ann. tit. 22, § 8703(1); id.§ 8704(1)(A).

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identifying information through one of three methods. Id. § 1711-10

E(4)(A)(1). When a prescriber opts in, the relevant Maine

licensing board must place the individual's name on a list that is

submitted every month to the Maine Health Data Organization, an

independent state executive agency. Id. § 1711-E(4)(A)(2). 11

When patients of an opted-in Maine prescriber fill their

prescriptions, the pharmacy still collects the prescriber's

identifying data and may transfer it to a central data center. The

law does not, by its terms, affect this transaction.

Section 1711-E(2-A) does regulate transactions between

those pharmacies (or pharmacy data centers) and prescription drug

information intermediaries like plaintiffs. Section 1711-E(2-A)

prohibits pharmacies from selling, transferring, or licensing

opted-in Maine prescribers' identifying data for a marketing

purpose, unless the prescriber revokes the protection. See id.

§ 1711-E(2-A),(4)(A)(3).

Once plaintiffs obtain prescriber-identifying data from

pharmacies, plaintiffs generate certain databases and reports

Though neither party has addressed who may enforce the12

Maine Unfair Trade Practices Act, it is undisputed that theattorney general can enforce section 1711-E on behalf ofindividuals through section 209 of the act.

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designed to facilitate detailing. If plaintiffs include opted-in

Maine prescribers' identifying data in these products, they have

"used" the data for a marketing purpose, in violation of section

1711-E(2-A). See id. § 1711-E(2-A). Section 1711-E(2-A) also

prohibits plaintiffs from selling or licensing (to pharmaceutical

manufacturers) only the portion of these databases and reports

containing opted-in Maine prescribers' identifying data. See id.

Once pharmaceutical manufacturers obtain these detailing-

oriented databases and reports, they generate individualized

reports for detailers, who then use individual prescribers' data to

target prescribers in Maine. Section 1711-E(2-A) does not

explicitly limit detailers' use of prescriber-identifying data, but

the earlier stages of regulation are meant to prevent this

information from getting to detailers for use in marketing.

A violation of section 1711-E(2-A)'s prohibitions is a

violation of the Maine Unfair Trade Practices Act, id. § 1711-E(3),

and, under that act, the Maine Attorney General can enjoin the

practice and levy civil penalties of $10,000 per violation, Me.

Rev. Stat. Ann. tit. 5, § 209. The law is not subject to criminal12

enforcement.

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Section 1711-E(2-A) was to go into effect on January 1,

2008, id. § 1711-E(2-A), but because plaintiffs obtained a

preliminary injunction before then, Maine has been prevented from

enforcing it. See Rowe, 532 F. Supp. 2d at 157. As of September

2009, notwithstanding the injunction, 259 Maine prescribers have

opted in for confidentiality protection.

III. First Amendment

We reject plaintiffs' First Amendment challenge to the

Maine law. Plaintiffs' claims fail for the same reasons we

rejected their nearly identical First Amendment challenge to New

Hampshire's similar statute in Ayotte. Plaintiffs' arguments here

fail for another, independent reason. Maine has set up an opt-in

scheme for prescribers licensed in Maine. Even assuming arguendo

that the Maine law restricts protected commercial speech and not

conduct, we hold that it directly advances the substantial purpose

of protecting opted-in prescribers from having their identifying

data used in unwanted solicitations by detailers, and thus Maine's

interests in lowering health care costs.

A.

In Ayotte, this circuit held that New Hampshire's

restrictions on plaintiffs' licensing, use, sale, transfer or

exchange of all New Hampshire prescribers' identifying data

regulate conduct, not speech, and thus the First Amendment does not

protect plaintiffs' conduct. 550 F.3d at 51-54.

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Ayotte alternately held that even if the New Hampshire law

regulates speech, plaintiffs are at best engaged in commercial

speech and the law survives intermediate scrutiny under Central

Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S.

557 (1980). Id. at 54-60. Ayotte also held that reducing health

care costs is a substantial government interest; the court did not

reach New Hampshire's two other asserted interests, protecting

citizens' health and protecting the confidentiality of patients'

and prescribers' identifying data. Id. at 55. The New Hampshire

law directly advances health care cost reduction given record

evidence showing that detailing increases prescription drug costs,

that detailers' effectiveness is bound up with their use of

individual prescribers' histories, and that reducing detailers'

access to prescribers' data would make prescribers less responsive

to detailers' efforts to market costly brand-name drugs. Id. at

55-58. Finally, Ayotte found that New Hampshire's law is no more

restrictive than necessary to advance the state's interest in

containing costs, though its prohibitions extend to all New

Hampshire prescribers' identifying data. Id. at 58-60.

Maine's law, which was modeled in part on New

Hampshire's, regulates the same kind of conduct for the same three

purposes: reducing health care costs in Maine, protecting Maine

patients' health, and protecting Maine patients' and prescribers'

identifying data from unwanted uses in Maine. Me. Stat. Rev. Ann.

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tit. 22, § 1711-E(A-1). Indeed, section 1711-E(2-A) differs from

the New Hampshire law only in ways that weaken plaintiffs' First

Amendment and other challenges. Unlike New Hampshire's law, the

Maine law only prohibits plaintiffs from licensing, using, selling,

transferring or exchanging data identifying prescribers licensed in

Maine who have opted-in for confidentiality protection. See id.

§ 1711-E(2-A). Unlike New Hampshire's legislature, the Maine

legislature included specific findings that limiting detailers' use

of Maine prescribers' identifying data would reduce health care

costs, ensure Maine prescribers' decisions were based on unbiased

medical and scientific evidence, and protect Maine prescribers from

unwanted detailing visits. Compare id. § 1711-E (1-A), with N.H.

Rev. Stat. Ann. § 318:47-f. Maine also introduced evidence into

the record to show how section 1711-E advances Maine's three

asserted interests.

Plaintiffs concede that Ayotte forecloses their First

Amendment challenge and that the district court's injunction, which

was granted based on their First Amendment claims before Ayotte was

decided, cannot be affirmed on those grounds. Plaintiffs

nonetheless reiterate shorthand versions of the same arguments this

court rejected in Ayotte: that their use, sale, and licensing of

prescriber-identifying information is speech, not conduct, and that

it is protected speech warranting strict scrutiny, not merely

Plaintiffs' overbreadth argument, not addressed by the13

district court, consists of the bare assertion that the Maine lawis overbroad because it prohibits the use of prescriber-identifyingdata when marketing all prescription drugs, not just those drugswithout any obvious financial or health benefit to patients. Thatargument is at best an assertion that section 1711-E(2-A) is notnarrowly tailored enough to serve Maine's interest in reducinghealth care costs. We rejected an analogous claim in Ayotte, see550 F.3d at 59-60, and the argument has no relevance to ouralternate holding in Part III.B.

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commercial speech. Their alternate claim, that the Maine law13

cannot survive intermediate scrutiny as commercial speech because

Maine has not introduced any evidence that the law will actually

reduce health care costs, is contradicted by Ayotte's reasoning,

and the record in this case supports Ayotte's conclusion. See 550

F.3d at 55-58. There is no basis for considering these arguments

anew.

We reject plaintiffs' contention that United States v.

Stevens, 130 S. Ct. 1577 (2010), undermines Ayotte's holding.

Stevens held that speech in the form of video depictions of animal

fighting is not categorically unprotected by the First Amendment,

see id. 1585-87. By contrast, Ayotte's initial holding was that

the New Hampshire law primarily regulated conduct, not speech. 550

F.3d at 51-54. Ayotte did suggest that any speech regulated was of

such minimal value that it likely fell outside of First Amendment

protections. Id. at 51-52. That suggestion, though, was in

service of Ayotte's holding that the New Hampshire statute

regulated conduct, not speech, an argument not at issue in Stevens.

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Further, Ayotte's alternate holding was that the New Hampshire law

would be upheld even if it regulated protected speech. Id. at 54-

60.

B.

We reject plaintiffs' First Amendment challenge to the

Maine law for a further reason particular to the Maine statute and

independent of Ayotte. Even if the Maine law regulates protected

speech, section 1711-E(2-A) directly serves Maine's substantial

interest in vindicating Maine prescribers' rights to avoid unwanted

targeting by detailers in Maine on the basis of their individual

prescribing histories.

This purpose is not solely about protecting prescribers'

expectation that their identifying data will remain categorically

private. See Rowe, 532 F. Supp. 2d. at 170-72. Prescribers' also

have a privacy interest in avoiding unwanted solicitations from

detailers who have used their individual prescribing data to

identify and target them. Maine's stated interest, in turn, is in

shielding those Maine-licensed prescribers who object to this

invasive use of their identifying information and who have opted in

to a system of protection the state provides. Me. Rev. Stat. Ann.

tit. 22, § 1711-E(1-A)(B),(1-B),(B). Like laws implementing "do

not call" lists, Maine advances this interest by allowing its

prescribers to join a list to stop their data from being licensed,

used, sold, transferred or exchanged for this unwelcome purpose.

Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 47214

U.S. 749 (1985), held that a consumer credit report made availableby a reporting agency to particular subscribers received less First

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If section 1711-E(2-A) regulates protected speech at all,

it regulates commercial speech, which the Supreme Court has defined

to include "expression related solely to the economic interests of

the speaker and its audience." Central Hudson, 447 U.S. at 561.

This circuit and others continue to apply this definition. See

Ayotte, 550 F.3d at 54; see also United States v. Philip Morris USA

Inc., 566 F.3d 1095, 1143 (D.C. Cir. 2009); BellSouth Telecomms.,

Inc. v. Farris, 542 F.3d 499, 504 (6th Cir. 2008); Procter & Gamble

Co. v. Amway Corp., 242 F.3d 539, 552 (5th Cir. 2001).

Plaintiffs' purported regulated "speech" consists of data

contained in databases and reports that plaintiffs have designed to

facilitate detailing. This is economically motivated content

tailored to a commercial use, namely, to help pharmaceutical

manufacturers better market brand-name prescription drugs to

particular prescribers. Cf. Bolger v. Youngs Drug Prods. Corp.,

463 U.S. 60, 66-68 (1983) (suggesting that use for an advertising

purpose and the speaker's economic motivations are relevant indicia

of commercial speech). Plaintiffs' collections of prescriber-

identifying data, if speech at all, would be commercial speech:

their purpose is to "facilitate the marketing of . . . services to

individual customers." U.S. W. Inc. v. FCC, 182 F.3d 1224, 1233

n.4 (10th Cir. 1999).14

Amendment protection because it was "solely in the individualinterest of the speaker and its specific business audience." Id.at 762. Though not explicitly labeled commercial speech, theSupreme Court nonetheless concluded that "many of the same concernsthat argue in favor of reduced constitutional protection in thoseareas apply here as well." Id. at 762 n.8.

Applying these principles in an analogous context, the D.C.Circuit held that a blanket prohibition on an intermediary's saleof targeted marketing lists identifying particular consumers withdesired characteristics was subject to lesser scrutiny. See TransUnion Corp. v. FTC, 245 F.3d 809, 818 (D.C. Cir. 2001). Thereports and databases plaintiffs prepare to facilitate detailingare indistinguishable from these cases for First Amendmentpurposes. Still, we use the Central Hudson framework.

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Under the Central Hudson framework, commercial speech is

protected if it is "neither misleading nor related to unlawful

activity." 447 U.S. at 564. That is not at issue here. Still,

protected commercial speech can be restricted if the "asserted

governmental interest is substantial," "the regulation directly

advances the governmental interest asserted," and the restriction

"is not more extensive than necessary to serve that interest." Id.

at 566; see also Ayotte, 550 F.3d at 55.

Assuming the opt-in statute regulates protected

commercial speech, Maine meets the test for restricting that

speech. Maine has a substantial interest in protecting its

prescribers from unwanted solicitations by detailers in Maine based

on their prescribing histories. "The unwilling listener's interest

in avoiding unwanted communication," the Supreme Court has held,

"has been repeatedly identified in our cases," and it is "an aspect

of the broader 'right to be let alone' that one of our wisest

Though many of these unwanted solicitations invade15

individuals' right to be left alone in their homes, a locationaccorded special protection, Hill formulated this right as one thatapplies more broadly, with special but not exclusive force in thehome. Hill, 530 U.S. at 717.

-24-

Justices characterized as 'the most comprehensive of rights and the

right most valued by civilized men.'" Hill v. Colorado, 530 U.S.

703, 716-17 (2000) (quoting Olmstead v. United States, 277 U.S.

438, 478 (1928) (Brandeis, J., dissenting)).

Maine has a substantial interest in vindicating this

right by allowing Maine-licensed prescribers to avoid being

subjected to unwelcome advertisements and solicitations. The

Supreme Court has recognized this interest in the context of "do

not mail" lists. See Rowan v. U.S. Post Office Dep't, 397 U.S.15

728, 736-38 (1970) (holding that a federal "do not mail" list

served "the very basic right to be free from sights, sounds, and

tangible matter we do not want"); see also FTC v. Mainstream Mktg.

Servs., Inc., 345 F.3d 850, 854-55 (10th Cir. 2003) (recognizing

the government's "substantial interest" in protecting individual

privacy through the federal "do not call" list). It undoubtedly

extends to protecting Maine prescribers who do not want their data

used to facilitate unwanted solicitations. See Trans Union Corp.

v. FTC, 245 F.3d 809, 818 (D.C. Cir. 2001) (recognizing the

government's "substantial interest" in "protecting the privacy of

This reasoning also disposes of plaintiffs' assertion16

that section 1711-E(2-A) is a prior restraint on their speechbecause it allows prescribers to prevent plaintiffs fromtransferring or using their data. That argument rests on themistaken assumption that plaintiffs have an absolute right toobtain prescriber-identifying data and to use it to facilitateunwelcome detailing practices.

-25-

consumer credit information" by preventing its use in targeted

marketing lists). 16

Section 1711-E(2-A) advances this interest directly.

Both the record evidence and common sense show that "the harms

[Maine] recites are real" and that the law "will in fact alleviate

them to a material degree." Ayotte, 550 F.3d at 55 (quoting

Edenfield v. Fane, 507 U.S. 761, 770-71 (1993)). Time and again,

the record establishes, Maine prescribers have not merely

complained about being subjected to detailing; they have identified

detailers' use of their personal prescribing histories as a

singularly objectionable practice. Maine's legislature found that

many prescribers had demanded legislative action to protect their

identifying data from this unwanted use. § 1711-E(1-A)(B).

Section 1711-E(2-A) does not, and need not, directly or

categorically prohibit detailing to address this harm. Rather,

Maine provides exactly the protections that Maine prescribers have

requested and allows prescribers to choose whether to invoke them.

Maine's opt-in confidentiality mechanism is also a less

restrictive means of vindicating prescribers' interests in not

having their information used in detailing. See Ayotte, 550 F.3d

-26-

at 59. Targeted prohibitions are by definition less restrictive

than a categorical ban. See United States v. Playboy Entm't.

Group, Inc., 529 U.S. 803, 815 (2000); see also Mainstream Mktg.

Servs., Inc. v. FTC, 358 F.3d 1228, 1242-43 (10th Cir. 2004). Opt-

in mechanisms like the "do not call" list are narrowly tailored by

nature: they "restrict only calls that are targeted at unwilling

recipients." Mainstream Mktg. Servs., 358 F.3d at 1242; see also

Fraternal Ord. of Police v. Stenehjem, 431 F.3d 591, 599 (8th Cir.

2005); Nat'l Fed'n of the Blind v. FTC, 420 F.3d 331, 342 (4th Cir.

2005); Bland v. Fessler, 88 F.3d 729, 733 (9th Cir. 1996). Opt-in

mechanisms also avoid concerns about state paternalism in the First

Amendment context. They regulate speech (if speech at all) only

when private individuals choose not to be subject to certain kinds

of communications, not simply because the state has identified

particular communications as harmful. Bland, 88 F.3d at 733.

Plaintiffs cursorily assert that Maine could have

regulated detailers' free samples to prescribers, educated doctors,

or implemented formulary controls as alternatives to section 1711-

E(2-A). Ayotte rejected these alternatives as ineffective ways to

advance a state's interest in health care costs. 550 F.3d at 59-

60. These alternatives do virtually nothing to advance Maine's

interest in protecting opted-in Maine prescribers' identifying data

Plaintiffs also introduced evidence on an AMA initiative17

that allows medical doctors to signal that they do not want theirprescribing data used in detailing. But the AMA has no real powerto limit plaintiffs' and other intermediaries' use of this data;compliance is monitored only through complaints to the AMA, andenforcement depends on plaintiffs and other intermediaries'goodwill prevailing over the strong financial incentives to usethis data. Moreover, the AMA scheme does not cover a host ofprescribers like nurse practitioners or osteopathic physicians, whomight want to protect their prescribing data but are ineligible forthe AMA scheme.

-27-

from use in detailing. Our analysis also disposes of plaintiffs'17

assertion that section 1711-E violates the Fourteenth Amendment as

an economic constraint unrelated to legitimate state interests.

IV. Vagueness

Plaintiffs also argue that section 1711-E(2-A)'s

prohibition on the use, transfer, licensing, sale, or exchange of

opted-in prescriber-identifying data "for any marketing purpose" is

unconstitutionally vague. Plaintiffs' brief claims that they

"simply sell the information" to pharmaceutical manufacturers, and

they have no intent to market or advertise pharmaceutical products

to prescribers themselves. Plaintiffs assert that the law is

unconstitutionally vague because they cannot know whether "any

marketing purpose" refers to their motivation in selling or

licensing the information or to pharmaceutical manufacturers'

ultimate purpose in obtaining the data.

Even if there were possible ambiguity in section 1711-

E(2-A)'s terms, the law is still not void for vagueness. Statutory

ambiguity is a regular byproduct of legislative drafting, but the

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vagueness doctrine invalidates only statutes whose terms are "so

uncertain that persons of average intelligence would have no choice

but to guess at [their] meaning and modes of application." United

States v. Nieves-Castaño, 480 F.3d 597, 603 (1st Cir. 2007)

(quoting United States v. Councilman, 418 F.3d 67, 84 (1st Cir.

2005) (en banc)) (internal quotation marks omitted); see also

Ridley v. Mass. Bay Transp. Auth., 390 F.3d 65, 93 (1st Cir. 2004).

Whatever ambiguity lurks in the phrase "any marketing purpose," the

law's lengthy definition of the term "marketing," see supra note 6,

surely provides enough of a benchmark to satisfy due process.

Further, this purported ambiguity does not exist on the

facts: plaintiffs, at minimum, intend for their databases and

reports to facilitate detailing. Plaintiffs portray themselves as

unwitting middlemen that sell prescriber-identifying information to

their clients with no knowledge or control of its ultimate use.

Plaintiffs' depositions and statements at oral argument reveal

instead that they are well aware that the primary and intended use

of their reports and databases is in detailing.

V. Dormant Commerce Clause

Plaintiffs' final constitutional challenge is that

section 1711-E(2-A), "as it is applied to the transactions in which

they engage out of the state and are shown by the record evidence,"

The Commerce Clause, which gives Congress the authority18

to "regulate Commerce . . . among the several States," U.S. Const.art I, § 8, cl. 3, also carries negative or implicit consequencesfor states' authority to regulate interstate commerce, referred toas the "dormant Commerce Clause." There is no claim that Congresshas acted and that Maine's statute must fail on that basis.

In recent years, the Supreme Court has sharply19

distinguished between facial and as-applied challenges, stringentlylimiting the availability of the former. See, e.g., Wash. StateGrange v. Wash. State Republican Party, 552 U.S. 442, 450-51(2008); see also G.E. Metzger, Facial Challenges and Federalism,105 Colum. L. Rev. 873, 878-80 (2005) (questioning whether theSupreme Court follows this doctrinal position in practice).

We did not address this distinction in Ayotte: plaintiffs'dormant Commerce Clause challenge to the New Hampshire statutethere was plainly identified as a facial challenge. See Ayotte,550 F.3d at 63.

Here, plaintiffs say they are not making any facial challenge.There is some question as to whether plaintiffs' pre-enforcement challenge can be properly characterized as an as-applied challenge.Plaintiffs have introduced record evidence showing that their useor sale of opted-in Maine prescribers' identifying data occursoutside Maine and that they are "prescription drug informationintermediaries" and thus potentially subject to regulation undersection 1711-E(2-A). But plaintiffs argue that the law applies totheir transactions only based on their statutory construction.

We accept plaintiffs' characterization of their argument as achallenge only to section 1711-E(2-A) as it applies to plaintiffs,as prescription drug information intermediaries, and not as topharmacies and other entities. See Milavetz, Gallop & Milavetz,P.A. v. United States, 130 S. Ct. 1324, 1339 & n.7 (2010). We alsoassume arguendo that plaintiffs' challenge is not subject to therestrictions on facial challenges. But we cannot acceptplaintiffs' assertion that section 1711-E(2-A) applies to theirout-of-state transactions without engaging in our own statutoryanalysis. Here, the issue is not whether plaintiffs belong to aclass of entities that section 1711-E(2-A) plainly regulatesextraterritorially; it is how to interpret section 1711-E(2-A)'s

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violates the dormant Commerce Clause. Because plaintiffs obtained18

an injunction before section 1711-E(2-A) went into effect, however,

the state has not promulgated regulations under this section, there

is no state decisional law, and the law has never been applied.19

intended scope. Cf. id. at 1339.

We do not decide whether section 1711-E(2-A) applies to20

pharmacies' or pharmaceutical manufacturers' out-of-statetransactions involving opted-in Maine prescribers. There is noindication that these entities cannot effectively assert their ownrights insofar as they are affected by section 1711-E(2-A).

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Plaintiffs assert that they are "prescription drug information

intermediaries" as defined in section 1711-E, and Maine does not

dispute this. Cf. Milavetz, Gallop & Milavetz, P.A. v. United

States, 130 S. Ct. 1324, 1339 & n.7 (2010).

Plaintiffs' challenge presents questions of whether

section 1711-E(2-A) would be interpreted under Maine law to apply

to plaintiffs' out-of-state use or sale of opted-in Maine

prescribers' identifying data, including whether the rule of

constitutional avoidance requires the statute to be interpreted not

to apply to plaintiffs' out-of-state transactions. As a matter20

of law, we hold that the statute applies to plaintiffs' out-of-

state use or sale of opted-in Maine prescribers' identifying data

and that the statute does so constitutionally. We also reject

plaintiffs' claim at oral argument that we should leave the

district court's injunction in place and remand this claim for

further proceedings.

Plaintiffs interpret section 1711-E(2-A) to apply to

their out-of-state transactions based on their construction of its

text. They claim that the regulation violates the so-called

"extraterritoriality" branch of the dormant Commerce Clause, which

-31-

they say prohibits direct regulation of interstate commerce that

occurs wholly outside a state's borders. In the alternative,

plaintiffs assert, this regulation violates the Pike balancing test

"because it does nothing to advance in-state interests and imposes

a heavy burden on interstate activity."

We reject plaintiffs' arguments. We interpret section

1711-E(2-A)'s scope by applying the rules of statutory construction

that the state's highest court would follow. Ayotte, 550 F.3d at

61; see also Adar v. Smith, 597 F.3d 697, 714 (5th Cir. 2010). We

hold, based on the text and legislative backdrop of section 1711-

E(2-A) and Maine's canons of statutory construction, that section

1711-E(2-A) regulates plaintiffs' out-of-state use or sale of

opted-in Maine prescribers' identifying data.

We further hold that this interpretation of the statute

does not raise constitutional concerns under the dormant Commerce

Clause. The Supreme Court's current dormant Commerce Clause

jurisprudence is concerned with preventing economic protectionism

and inconsistent regulation, not with enforcing geographical limits

on states' exercise of their police power that necessarily regulate

commerce. Even under the extraterritoriality branch of the dormant

Commerce Clause, the Supreme Court has not barred states from

regulating any commercial transactions beyond their borders that

involve their own citizens and create in-state harms. Nor does the

Maine law create constitutional concerns under the Pike balancing

-32-

test. Plaintiffs have not shown any disproportionate burden on

interstate commerce, and the law creates substantial in-state

benefits for those Maine prescribers who have affirmatively asked

Maine to protect their identifying data and for Maine in its

efforts to lower health care costs.

A. Section 1711-E(2-A)'s Text and Setting

The text of the statute shows section 1711-E(2-A) was

intended to apply to plaintiffs' out-of-state use or sale of opted-

in Maine prescribers' identifying data. The statutory text shows

that section 1711-E(2-A) was designed to address a significant

problem occurring in Maine, whose solution has some cross-border

implications. The law is concerned only with "prescribers in the

health care system of [Maine]," Me. Rev. Stat. Ann. tit. 22,

§ 1711-E(1-B), not prescribers anywhere in the United States, and

specifically those prescribers who have opted in to Maine's

"mechanism for protecting the confidentiality of identifying

prescription drug information from use for marketing purposes," id.

§ 1711-E(1-A)(B). The statute further recognizes that these

marketing uses occur "[a]cross the nation" when "data companies

purchase for marketing purposes computerized prescription drug

records from pharmacies and insurers that identify prescribers."

Id. § 1711-E(1-A)(C). The statutory text also identifies specific

harms arising from these transactions--invasions of prescribers'

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privacy, increased health care costs, and harms to public health--

as occurring in Maine. See § 1711-E(1-B).

Section 1711-E(2-A)'s context confirms that the Maine

Legislature intended to reach plaintiffs' out-of-state conduct

because of its substantial connections to Maine and because it

causes harms exclusively in Maine. Section 1711-E(2-A) targets a

series of underlying transactions that cause these harms, which

start and end in Maine, even if all the transactions covered in

order to effectuate the statute's purposes do not occur in Maine.

Maine prescribers' prescriptions are primarily, if not exclusively,

filled at Maine pharmacies. Data from those Maine pharmacies are

ultimately transferred to prescription drug information

intermediaries like plaintiffs through contractual arrangements.

Plaintiffs' subsequent use and sale of Maine prescribers'

identifying data to generate detailing-oriented databases and

reports may occur outside Maine, but those activities are bound up

with pharmaceutical manufacturers' ultimate use of the information

in detailing that targets Maine prescribers in Maine.

The law also takes effect only if Maine prescribers

affirmatively indicate that they want Maine to protect the

confidentiality of their identifying information. See id. § 1711-

E(1)(G-1), (2-A), (4). Every intermediate step is limited to

transactions involving these prescribers' identifying data. See

id. § 1711-E(2-A). The law's ultimate effect is to prevent

In Ayotte, this court held that the presumption against21

construing New Hampshire's statute to apply extraterritorially hadnot been overcome, not least because the New Hampshire AttorneyGeneral insisted that New Hampshire only sought to regulate conductwithin its borders. 550 F.3d at 63-64.

-34-

detailers with Maine routes from targeting Maine prescribers with

their own prescribing histories. Id. § 1711-E(1-A), (1-B).

B. Presumption against Extraterritoriality

Our interpretation of section 1711-E(2-A) also comports

with Maine's canons of statutory construction. Maine, like other

states, generally presumes its statutes do not apply

extraterritorially in the absence of contrary indications of

legislative intent. See Holbrook v. Libby, 94 A. 482, 483 (Me.

1915); see also 73 Am. Jur. 2d Statutes § 250 (2010). That

presumption is overcome here: the Maine Legislature plainly

intended section 1711-E(2-A) to regulate plaintiffs' out-of-state

use or sale of opted-in Maine prescribers' identifying data. 21

Maine's presumption against extraterritoriality reflects

inherent limitations on the scope of states' sovereign regulatory

powers. See Stavis Ipswich Clam Co. v. Green, 236 A.2d 708, 712

(Me. 1968). This presumption is not a per se rule because those

state powers are not mechanically limited to conduct occurring

within a state's physical borders. As one learned commentator has

noted, "[i]n practice, states exert regulatory control over each

other all the time . . . . [A] state's geographic territory does

not mark the outer limit of its legitimate regulatory concern."

Other states have similarly recognized that "a state may22

have the power to legislate concerning the rights and obligationsof its citizens with regard to transactions occurring beyond itsboundaries." N. Alaska Salmon Co. v. Pillsbury, 162 P. 93 (Cal.1916); see also Sexton v. Ryder Truck Rental, Inc., 320 N.W.2d 843,854 (Mich. 1982); 73 Am. Jur. 2d Statutes § 250 (2010). Numeroustypes of state statutes have extraterritorial effect. See, e.g.,State v. Flores, 188 P.3d 706, 710 (Ariz. Ct. App. 2008) (criminallaws); Boca Petroco, Inc. v. Petroleum Realty II, LLC, 678 S.E.2d330, 333-34 (Ga. 2009) (lis pendens statutes); Heath Consultants,Inc. v. Precision Instruments, Inc., 527 N.W.2d 596, 607 (Neb.1995) (antitrust law).

-35-

G.E. Metzger, Congress, Article IV, and Interstate Relations, 120

Harv. L. Rev. 1468, 1521-22 (2007). Indeed, an entire body of

conflict of laws cases apply state laws to extraterritorial

conduct. See K. Florey, State Courts, State Territory, State

Power: Reflections on the Extraterritoriality Principle in Choice

of Law and Legislation, 84 Notre Dame L. Rev. 1057, 1073-74 (2009).

Maine, like other states, has construed its laws to apply

to extraterritorial conduct with a substantial impact in or

connection to Maine's residents or licensees. See, e.g., State v.

Hayes, 603 A.2d 869, 870 (Me. 1992) (upholding the extraterritorial

enforcement of Maine's lobster laws to vessels registered in

Maine); Dissell v. Trans World Airlines, 511 A.2d 441, 444-45 (Me.

1986) (applying Maine's worker's compensation statute to require an

out-of-state airline to further compensate a flight attendant

stationed and injured out of state but residing in Maine because of

sufficient contacts with Maine). Section 1711-E(2-A)'s22

application to plaintiffs is within Maine's sovereign authority.

The Maine Attorney General has argued that the law23

regulates persons or entities over whom Maine can exercise personaljurisdiction. That interpretation states a limitation on anyextraterritorial application of a statute: it must comport with therequirements of the Due Process and Full Faith and Credit Clauses.Allstate Ins. Co. v. Hague, 449 U.S. 302, 308 (1981). Plaintiffshave not argued that section 1711-E(2-A)'s application to theirout-of-state transactions would violate those provisions. But thatdoes not by definition alleviate constitutional concerns under thedormant Commerce Clause, which serves different purposes. QuillCorp. v. North Dakota, 504 U.S. 298, 312-13 (1992).

-36-

C. Constitutional Avoidance and the Dormant Commerce Clause

Finally, we reject the argument that section 1711-E(2-

A)'s application to prescription drug information intermediaries'

out-of-state use or sale of opted-in Maine prescribers' identifying

data would raise constitutional concerns under the dormant Commerce

Clause. Under Maine and federal law, we must "avoid an23

unconstitutional construction of a statute if a reasonable

interpretation of the statute would satisfy constitutional

requirements." Anderson v. Town of Durham, 895 A.2d 944, 951 (Me.

2006) (quoting Bagley v. Raymond Sch. Dep't, 728 A.2d 127, 133 (Me.

1999)) (internal quotation marks omitted). There is no need for

constitutional avoidance here.

We begin with the Supreme Court's current dormant

Commerce Clause jurisprudence, which provides no foundation for

plaintiffs' contention that Maine's regulation of their out-of-

state use or sale of opted-in Maine prescribers' data would raise

constitutional concerns. The dormant Commerce Clause sets two

complementary boundaries for states' regulatory powers over

This limitation on states' powers is grounded in the24

historical origins of the Commerce Clause, which gives Congress thepower to "regulate Commerce . . . among the several States." U.S.Const. Art I, § 8, cl. 3. The Framers saw this as an essentialelement of the Constitution to avoid the "economic Balkanization"that had prevailed under the Articles of Confederation, under whichstates had enacted rampant tariffs and other trade barriers at theprice of national economic unity. See Davis, 553 U.S. at 337-38;Granholm v. Heald, 544 U.S. 460, 472 (2005).

-37-

commerce. On one hand, states cannot interfere with Congress's

constitutional authority over interstate commerce by enacting laws

that seriously impede interstate commerce, even when Congress has

not acted. See Dep't of Revenue v. Davis, 553 U.S. 328, 337-38

(2008). On the other hand, states "retain authority under their24

general police powers to regulate matters of legitimate local

concern, even though interstate commerce may be affected." Maine

v. Taylor, 477 U.S. 131, 138 (1986) (quoting Lewis v. BT Inv.

Managers, Inc., 447 U.S. 27, 36 (1980)) (internal quotation marks

omitted). Further, in fields traditionally subject to state

regulation, federal courts "should be particularly hesitant to

interfere with [states'] efforts under the guise of the Commerce

Clause." United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste

Mgmt. Auth., 550 U.S. 330, 344 (2007) (alterations in original).

As to the first of these boundaries, "the dormant

Commerce Clause is driven by concern about 'economic protectionism-

-that is, regulatory measures designed to benefit in-state economic

interests by burdening out-of-state competitors." Davis, 553 U.S.

at 337-38 (quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269,

Though New Hampshire and Vermont's laws differ somewhat25

from Maine's, neither purports to regulate any prescriber anywhere.

Nor, as we discuss below, would this interpretation of26

section 1711-E(2-A) result in excessive burdens on interstatecommerce relative to in-state benefits.

-38-

273) (1988)). Similar concerns about hidden protectionism and

excessive barriers to interstate trade arise when states enact laws

likely to subject entities engaged in interstate commerce to

incompatible cross-state regulatory regimes, see CTS Corp. v.

Dynamics Corp. of Am., 481 U.S. 69, 88-89 (1987); S. Pac. Co. v.

Ariz. ex rel. Sullivan, 325 U.S. 761, 767-68 (1945), or laws with

minimal in-state benefits and a disproportionate impact on

interstate commerce, see Pike, 397 U.S. at 142.

These concerns are central to the way the Supreme Court

has framed the dormant Commerce Clause in its recent opinions. The

Maine law implicates none of them. Maine's regulation of

prescription drug information intermediaries' out-of-state use or

sale of opted-in Maine prescribers' data does not discriminate

against out-of-state entities in favor of in-state competitors, nor

do plaintiffs so argue. Maine's law does not risk imposing

regulatory obligations inconsistent with those of other states. No

other states have erected competing regulations, much less opposing

regulations requiring the transfer of Maine prescribers' data. 25

This is simply not an example of a state engaged in economic

protectionism. Cf. Davis, 553 U.S. at 337-39. 26

-39-

Maine's interests, on the other hand, are precisely the

kind of traditional state concerns that the Supreme Court has

identified as falling outside the reach of the dormant Commerce

Clause. See Davis, 553 U.S. at 342; United Haulers, 550 U.S. at

344-45. States are "vested with the responsibility of protecting

the health, safety, and welfare of [their] citizens." United

Haulers, 550 U.S. at 342. To serve those interests, states

exercise the kind of local autonomy essential to federalism. "The

essence of our federal system is that within the realm of authority

left open to them under the Constitution, the States must be

equally free to engage in any activity that their citizens choose

for the common weal." Davis, 553 U.S. at 338 (quoting Garcia v.

San Antonio Metro. Transit Auth., 469 U.S. 528, 546 (1985))

(internal quotation marks omitted).

Maine has a uniquely strong interest in protecting Maine

prescribers who have invoked Maine's regulatory authority through

the opt-in scheme. Cf. CTS, 481 U.S. at 89. Maine has done so

because these commercial transactions also harm the public health

and increase Maine's health care costs. In advancing these

interests, Maine has regulated in a traditional area of state

concern without undercutting other states' regulatory schemes or

encroaching on their interests. Maine's choice must be respected.

The Maine statute falls outside the central concerns of

the Court's dormant Commerce Clause jurisprudence for another

Extraterritoriality has been the dormant branch of the27

dormant Commerce Clause. Despite a host of subsequent dormantCommerce Clause cases, see, e.g., Davis, 553 U.S. 328; UnitedHaulers, 550 U.S. 330; Am. Trucking Ass'ns, Inc. v. Mich. Pub.Serv. Comm'n, 545 U.S. 429 (2005); Granholm, 544 U.S. 460, theSupreme Court last mentioned the doctrine in a paragraph of a 2003decision to reject its applicability. The Court pointedly referredto it as "[t]he rule that was applied in Baldwin and Healy," casesdecided in 1935 and 1989. Pharm. Research & Mfrs. of Am. v. Walsh,538 U.S. 644, 669 (2003) (citing Healy, 491 U.S. 324; Baldwin v.G.A.F. Seelig, Inc., 294 U.S. 511 (1935)). We nonetheless assumethis doctrine remains viable. See State Oil Co. v. Khan, 522 U.S.3, 20 (1997). Even so, plaintiffs' challenge fails.

-40-

reason. Maine has not shifted the costs of regulation to other

states whose voters cannot affect its legislative choices, nor does

the Maine law "hand local businesses a victory they could not

obtain through the political process." United Haulers, 550 U.S. at

345. Maine's political processes produced this statute, and Maine

voters can, if they disagree, reverse this policy.

Plaintiffs ignore these foundational principles; indeed,

plaintiffs ignore virtually every Supreme Court dormant Commerce

Clause case after 1989. Instead, plaintiffs say section 1711-E(2-

A)'s application to their conduct would violate an infrequently

applied strand of the dormant Commerce Clause loosely labeled

extraterritoriality. Its central premise is that "a statute that27

directly controls commerce occurring wholly outside the boundaries

of a State exceeds the inherent limits of the enacting State's

authority and is invalid regardless of whether the statute's

extraterritorial reach was intended by the legislature." Healy v.

Beer Inst., Inc., 491 U.S. 324, 336 (1989) (emphasis added); see

Some circuits have simply framed the doctrine in terms of28

concerns with preventing economic protectionism or inconsistentregulatory regimes, see, e.g., Cloverland-Green Spring Dairies,Inc. v. Penn. Milk Mktg. Bd., 462 F.3d 249, 262-63 (3d Cir. 2006);Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 81-83(1st Cir. 2001), aff'd sub nom. Pharm. Research & Mfrs. of Am., 538U.S. 644, or have suggested that the Court's cases do not dictate"the notion that direct and facial regulation of extraterritorialtransactions is absolutely banned," Alliant Energy Corp. v. Bie,336 F. 3d 545, 547-50 (7th Cir. 2003); see also J. Goldsmith & A.Sykes, The Internet and the Dormant Commerce Clause, 110 Yale L.J.785, 789-90 & n.26 (2001).

-41-

also Alliance of Auto Mfrs. v. Gwadowsky, 430 F.3d 30, 35 (1st Cir.

2005). Plaintiffs further suggest that this doctrine applies not

to the Maine law as applied to prescription drug information

intermediaries but to their atomized transactions only. Plaintiffs

make no attempt to square these principles with the Court's current

dormant Commerce Clause jurisprudence or to explain how these

principles fit with its central concerns. In any event, this

doctrine is inapplicable.

Whatever the present scope of the extraterritoriality

doctrine, it clearly does not require per se invalidation of all

extraterritorial applications contained within state statutes

regulating commerce. Section 1711-E(2-A) does not regulate wholly28

extraterritorial commercial transactions. Its regulation of

plaintiffs' use or sale of opted-in Maine prescribers' data affects

only Maine prescribers and regulates transactions that impact

Maine, with incidental effects elsewhere. It is instead one of "an

infinite variety of cases in which regulation of local matters may

Limitations on states' regulation of extraterritorial29

commerce have been justified because "one State's power to imposeburdens on the interstate market . . . is also constrained by theneed to respect the interests of other States." BMW of N. Am. v.Gore, 517 U.S. 559, 571 (1996) (internal citation omitted); seealso Healy, 491 U.S. at 336-37.

That has never meant that states are powerless to regulate alltransactions beyond their borders, including transactions involvingtheir citizens. States' interests may justify extraterritorialregulation in contexts ranging from taxation under the dormantCommerce Clause, see, e.g., MeadWestvaco Corp. ex rel. Mead Corp.v. Ill. Dep't of Revenue, 553 U.S. 16, 24-25 (2008), to theenforcement of criminal and tort law, see, e.g., Young v. Masci,289 U.S. 253, 259 (1933); Strassheim v. Daily, 221 U.S. 280, 285(1911) (Holmes, J.); see also Bigelow v. Virginia, 421 U.S. 809,834-35 & 834 n.2 (1975) (Rehnquist, J., dissenting).

The Edgar v. MITE plurality reasoned that "[t]he limits on aState's power to enact substantive legislation are similar to thelimits on the jurisdiction of state courts." 457 U.S. at 643(plurality opinion). But the expansion of personal jurisdictionbeyond the rigid geographical rules of Pennoyer v. Neff, 95 U.S.714 (1877), to the nexus-oriented approach of International ShoeCo. v. Washington, 326 U.S. 310 (1945), only reinforces the factthat states' jurisdiction--whether legislative or adjudicatory--isnot categorically limited to their territory in any context.

-42-

also operate as a regulation of commerce," requiring "appraisal and

accommodation of the competing demands of the state and national

interests involved." S. Pac. Co., 325 U.S. at 768-69.29

The Supreme Court has applied the so-called

extraterritoriality doctrine sparingly, and in ways that only

reinforce the conclusion that Maine can regulate plaintiffs' out-

of-state use and sale of Maine prescribers' identifying data. The

Court has only struck down two related types of statutes on

extraterritoriality grounds. The first are price-affirmation

statutes that force regulated entities to certify that the in-state

price they charge for a good is no higher than the price they

The challenged price-affirmation laws were also deemed30

unconstitutional because they discriminated against out-of-stateentities in favor of in-state competitors, see Healy, 491 U.S. at340-41; Baldwin, 294 U.S. at 522, or because of their protectionisteffects for consumers, Brown-Forman, 476 U.S. at 580. Likewise,only a plurality in Edgar v. MITE would have invalidated onextraterritoriality grounds the challenged Illinois law, whichrequired companies to obtain regulatory approval for takeover bidsof corporations with no real relation to Illinois. See 451 U.S. at641 (plurality opinion). The majority only invalidated the law asan excessive burden on interstate commerce under Pike. Id. at 644.

-43-

charge out of state. See Healy, 491 U.S. at 337-40; Brown-Forman,

476 U.S. at 582-84; Baldwin, 294 U.S. at 521-22. The second are

statutes that "force an out-of-state merchant to seek regulatory

approval in one State before undertaking a transaction in another."

Healy, 491 U.S. at 337; see also Edgar v. MITE Corp., 457 U.S. at

627, 642-43 (plurality opinion). Even these statutes are not

invariably struck down. See CTS, 481 U.S. at 88-89 (upholding a

statute regulating takeovers of corporations with a strong in-state

nexus by limiting the acquisition of control shares).

The Maine law is easily distinguishable from the

invalidated statutes. Those state statutes--unlike section 1711-

E(2-A)--raised independent concerns about protectionism under

established strands of the dormant Commerce Clause. Moreover,30

unlike the Maine law, none of the invalidated statutes dealt with

harms caused exclusively inside the regulating state. Nor were the

invalidated statutes limited to regulating transactions with a

significant inherent connection to the regulating state, and

involving its own professional licensees. Those differences, and

Baldwin involved a New York price affirmation statute31

that required out-of-state milk buyers to certify that they paidout-of-state milk producers no more than what New York producersreceived. See 294 U.S. at 519. The Court deemed the law animpermissible attempt to project New York's pricing regime on otherstates because it had no "direct and certain" relationship to NewYork's asserted interest in ensuring a supply of sanitary milk, id.at 524, and the asserted purpose of protecting local farmers'economic welfare was impermissibly protectionist, id. at 523.

In Edgar v. MITE, the plurality found the Illinois corporatetakeover bid law had a "sweeping extraterritorial effect" becauseit would "regulate a tender offer which would not affect a singleIllinois shareholder" and thus reached conduct in which Illinoishad no conceivable interest. 457 U.S. at 642 (plurality opinion).

Likewise, the price affirmation statutes in Healy andBrown-Forman were not limited to transactions involving theregulating state; they made in-state prices that out-of-stateshippers charged for alcohol contingent on the price those shipperscharged elsewhere. See Healy, 491 U.S. at 326-27; Brown-Forman,476 U.S. at 576. The only in-state interest served by such laws,the Court suggested, was to illegitimately protect local interests.See Healy, 491 U.S. at 340-41; Brown-Forman, 476 U.S. at 580.

In CTS, the Supreme Court rejected an extraterritoriality32

challenge to an Indiana statute limiting out-of-state tenderofferors' acquisition of control shares in certain corporations.The Court reasoned that the law was limited "only to corporationsincorporated in Indiana" with substantial numbers of shareholdersin Indiana, and therefore "every application of the Indiana Actwill affect a substantial number of Indiana residents, whom Indianaindisputably has an interest in protecting." 481 U.S. at 93.

-44-

not the mere fact that those statutes directly regulated

out-of-state transactions, explain why the Supreme Court deemed

those statutes wholly extraterritorial.31

Plaintiffs' attempt to analogize the Maine law to these

cases fails. The Supreme Court has previously distinguished and

upheld a state statute that regulated out-of-state commercial

transactions with a clear in-state nexus and impact. See CTS, 481

U.S. at 93. Other circuits have upheld similar laws on this32

This holding does not put our circuit at odds with a33

recent panel opinion of the Seventh Circuit. Midwest Title Loans,Inc. v. Mills invalidated on extraterritoriality grounds aprovision of an Indiana statute that forbade lenders that solicitedor advertised their lending services in Indiana from making titleloans to Indiana residents, unless they obtained a license fromIndiana (and thereby agreed to be bound by Indiana's restrictionson the kind of loans permitted). See 593 F.3d 660, 662, 669 (7thCir. 2010). Midwest Title reasoned that states should not beallowed to control interstate commerce to prevent their citizensfrom engaging in out-of-state conduct that the regulating state(but not the citizens themselves) deems harmful. See id. at 663-65, 666, 669.

The Maine law does not raise similar concerns. It regulatesonly data from those Maine prescribers who have asked Maine toprotect their data. It does not force other states to apply theregulating state's paternalistic regulatory choices even when itsresidents want to engage in prohibited conduct elsewhere.

We need not decide whether the Pike balancing test34

requires courts to look to the relative benefits and burdens of the

-45-

basis. See, e.g., Quik Payday, Inc. v. Stork, 549 F.3d 1302, 1308-

09 (10th Cir. 2008); S. Union Co. v. Mo. Pub. Serv. Comm'n, 289

F.3d 503, 507-08 (8th Cir. 2002); Baltimore Gas & Elec. Co. v.

Heintz, 760 F.2d 1408, 1421-27 (4th Cir. 1985); cf. Am. Booksellers

Found. v. Dean, 342 F.3d 96, 103-04 (2d Cir. 2003). That

reasoning, not the broad rule plaintiffs try to derive from Healy

and its antecedents, governs here. Under these circumstances, we33

hold that section 1711-E(2-A)'s regulation of plaintiffs' conduct

does not raise constitutional concerns under the

extraterritoriality branch of the dormant Commerce Clause.

Finally, we reject plaintiffs' alternate contention that

section 1711-E(2-A) would raise constitutional concerns under Pike

if applied to plaintiffs' out-of-state transactions. Plaintiffs34

statute as a whole or only to its effect on prescription druginformation intermediaries. Plaintiffs have provided no data aboutrange of prescription drug information intermediaries subject tosection 1711-E(2-A) or the relative proportion of overall businesstransacted in Maine versus outside it. Plaintiffs' Pike challengearguably fails on that basis alone; the Pike balancing test isabout burdens on the interstate market as a whole, not aboutburdens on particular firms. Even looking only to the law's impacton plaintiffs' out-of-state transactions, the argument fails.

-46-

did not make this argument to the district court; their brief on

appeal cursorily asserts that the law has no in-state benefits and

only out-of-state costs. That is waiver. See Mass. Museum of

Contemporary Art Found. v. Büchel, 593 F.3d 38, 65 (1st Cir. 2010).

This claim is also meritless. "State laws frequently

survive this Pike scrutiny," Davis, 553 U.S. at 339, and section

1711-E(2-A) is no exception. To date, 259 Maine prescribers out of

Maine's 7,500 total prescribers have opted in to Maine's

confidentiality protections. Section 1711-E(2-A)'s regulation of

plaintiffs' transactions would confer clear in-state benefits by

enabling those prescribers to avoid unwanted targeting in Maine.

Nothing suggests that the costs to interstate commerce

would be disproportionate in relation to these benefits. The loss

of several hundred data points in Maine, out of some 7,500 total

Maine prescribers and 1.5 million prescribers nationwide, is

unlikely to seriously impact the marketability of plaintiffs'

products. Nor have plaintiffs shown that the costs of complying

with section 1711-E(2-A)'s protections meaningfully burden

interstate commerce. There is no obvious reason why cross-

-47-

referencing the Maine Health Data Organization's list of opted-in

Maine prescribers to avoid using or selling this data would prove

particularly costly or difficult, let alone enough to warrant

invalidation of a state law. We also heed the cautionary note the

Court sounded in Davis: federal courts have less institutional

competence than states in measuring the costs and benefits of

particular state regulatory schemes. See 553 U.S. at 355-57.

VI.

The judgment of the district court is reversed, and the

case is remanded with instructions to dismiss the case with

prejudice. Costs are awarded to the defendant.

-Concurring Opinion Follows-

1

The decision in Sorrell has been appealed to the Second35

Circuit, and oral argument in the case (No. 09-1913) was heard onOctober 13, 2009.

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LIPEZ, Circuit Judge, concurring in the judgment. The

Maine statute at issue here, like the New Hampshire law we

considered in IMS Health Inc. v. Ayotte, 550 F.3d 42 (1st Cir.

2008), is a creative effort to meet escalating concerns about the

high cost of prescription drugs and the way they are marketed.

Other states have passed or considered similar legislation. See,

e.g., IMS Health Inc. v. Sorrell, 631 F. Supp. 2d 434, 446 (D. Vt.

2009) (addressing a Vermont statute); IMS Health Corp. v. Rowe,35

532 F. Supp. 2d 153, 180 n.41 (D. Me. 2008) (noting initiatives in

other states); Michael Heesters, Comment, An Assault on the

Business of Pharmaceutical Data Mining, 11 U. Pa. J. Bus. L. 789,

791 (2009) (same). The two statutes that we have reviewed, along

with Vermont's, are aimed at restricting the messages that may be

presented by pharmaceutical detailers to prescribers. Because

these provisions have the purpose and effect of regulating the

content of speech, their compatibility with the First Amendment is

a challenging issue that inevitably will be considered by the

Supreme Court.

The statutes specifically seek to prevent pharmaceutical

detailers from using the prescribing histories of individual health

care professionals in their marketing approach to prescribers. In

the view of the States, these individualized sales pitches result

Each statute operates slightly differently. The New36

Hampshire law imposes an outright prohibition on the sale or use ofprescriber-identifiable data for marketing purposes. N.H. Rev.Stat. Ann. §§ 318:47-f, 318:47-g, 318-B:12(IV) (2006). Maine'sstatute imposes such a prohibition only for prescribers who chooseto prevent their prescribing information from being used to marketprescription drugs to them – the so-called "opt-out" approach. Me.Rev. Stat. Ann. tit. 22, § 1711-E(2-A). Vermont's law has an "opt-in" feature, prohibiting certain entities from selling or usingprescriber-identifiable data for marketing or promotingprescription drugs unless the prescriber consents. Vt. Stat. Ann.tit. 18, § 4631.

The Vermont statute limits the exchange of prescriber-37

identifiable information among the same entities as the NewHampshire and Maine provisions, but it also bars pharmaceuticalmanufacturers and marketers from using the information formarketing or promoting a prescription drug unless the prescriberconsents. See Vt. Stat. Ann. tit. 18, § 4631(d).

-49-

in the over-prescription of high-priced, brand-name drugs, thereby

needlessly increasing public expenditures on prescription drugs

and, at times, harming patient health. In an effort to minimize36

the First Amendment implications of their content-based goal, Maine

and New Hampshire attempted to cut off access to the prescribing

information at its source. Hence, the statutes prohibit the sale,

transfer or other dissemination of prescriber-identifiable

information among pharmacies and other data-collecting entities for

marketing purposes, but impose no direct limitation on the drug

companies or sales people who do the actual marketing. The States37

insist that the laws thus regulate conduct, not protected speech.

As I explained in Ayotte, it begs reality to

characterize these laws as regulations of conduct. Maine's

statute, like New Hampshire's, must be judged for what it is – a

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restriction on protected speech subject to the demands of the First

Amendment. That view has been validated by the Supreme Court's

recent decision in United States v. Stevens, 130 S. Ct. 1577

(2010). See infra Section II. However, as construed by the State,

Maine's law also has a substantial ripple effect beyond Maine's

borders that requires review under the dormant Commerce Clause. By

shifting the statute's focus away from the activity considered

harmful – the detailers' interactions with prescribers in Maine –

to the earlier sales of the data, the Legislature in practical

effect targeted transactions that occur primarily outside the

State.

I agree with the majority that this out-of-state reach is

not fatal. I write separately, however, to highlight the unusual

relationship between the First Amendment and Commerce Clause

issues. Indeed, after examining the law's impact on interstate

commerce, I conclude that the First Amendment is the appropriate

battleground for constitutional analysis as these cases move

through the courts.

I. The First Amendment-Commerce Clause Dance

As a reflection of the analytic difficulties posed by New

Hampshire's and Maine's laws on the use, sale and other

dissemination of prescriber-identifiable data, their provisions are

baffling even to their proponents. New Hampshire's Attorney

General asserted in Ayotte that the law should be construed to

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govern only in-state transactions, see 550 F.3d at 63-64, an

interpretation that renders the statute largely irrelevant because

the transfers of data the statute purports to restrict occur almost

entirely out-of-state. Maine, by contrast, concedes that its

similarly worded provision reaches out-of-state activity. At oral

argument, however, when pressed about the statute's reach, the

State's counsel asserted that section 1711-E(2-A) would cover the

pharmaceutical detailers' use in Maine of the prescriber-

identifiable data – even though the law appears to have been

designed precisely to avoid directly restricting the detailers'

speech to prescribers.

Counsel noted, for example, that "use in Maine is what

the statute is directed at and that would be proscribed regardless

of whether or not [an out-of-state] transaction before that was

subject to the Act." Counsel also stated that, "[i]f the

assumption is that the transaction between IMS or one of the other

plaintiffs and the drug companies occur[s] totally outside the

State, then what the statute covers is the subsequent use in Maine

by the detailer." That explanation is at odds with my previous

understanding of the State's construction of the statute, which

explicitly applies to "a carrier, pharmacy or prescription drug

information intermediary" ["PDII"] – not to pharmaceutical

companies and their employees. That explanation is also at odds

with the district court's reading of the law. See Rowe, 532 F.

The majority in this case makes the same assumption:38

"Section 1711-E(2-A) does not explicitly limit detailers' use ofprescriber-identifying data, but the earlier stages of regulationare meant to prevent this information from getting to detailers foruse in marketing."

-52-

Supp. 2d at 169 ("The Law does not make illegal a drug company's

use of opt-out prescriber information for marketing purposes. . .

. The Law forbids the PDIIs from selling opt-out data for

marketing, but it does not prohibit the pharmaceutical companies

from using the data for marketing.").38

Although the plaintiffs also state in their brief that

drug companies fall within the statute's definition of a PDII, that

construction departs from plain language and ordinary usage. It

may be, as plaintiffs' counsel explained at oral argument, that a

drug manufacturer could be treated as a PDII when it transacts

directly with pharmacies or other sources of prescription data. As

a general matter, however, drug companies are not PDIIs, and

classifying them as such when they are not acting in that capacity

is not a defensible reading of the statute. Thus, my assumption

throughout is that the statute does not directly regulate drug

manufacturers and their employees, including detailers, unless the

drug manufacturer acts as its own PDII.

The confusion over how the statutes operate arises from

the States' attempts to achieve indirectly its ultimate objective

– limiting the content of the detailers' messages. By restricting

the dissemination of prescriber-identifiable data rather than the

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detailers' messages themselves, the States hoped their laws would

be evaluated as restrictions on conduct rather than speech. The

First Amendment consequences of regulating the content of speech do

not disappear, however, simply because the regulation operates

indirectly. See infra. In this instance, the indirection has only

made the constitutional inquiry more complex.

In particular, the States' approach magnified the

Commerce Clause implications of the legislation because the

targeted transfers of prescriber-identifiable data for marketing

purposes occur primarily outside of both New Hampshire and Maine.

Evidently feeling caught in a constitutional bind, the New

Hampshire Attorney General construed her state's statute to govern

only in-state transactions – effectively stripping the law of any

impact. Although Maine has rejected such a narrow construction, it

is still scrambling to define the reach of its legislation.

In my view, the States should have confronted directly

the First Amendment challenges of what they sought to do. Their

indirect approach has not avoided First Amendment scrutiny, yet

they have generated the Commerce Clause complications that we must

address here. Those complications might have been avoided with

more straightforward laws addressing the States' concerns about

pharmaceutical detailing.

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II. The First Amendment

I recognize that the majority decision in Ayotte is

binding precedent for the proposition that the statute at issue

here, like the statute in Ayotte, regulates conduct, not speech.

See United States v. Rodríguez, 527 F.3d 221, 224 (1st Cir. 2008)

("As a general rule, newly constituted panels in a multi-panel

circuit are bound by prior panel decisions closely on point."). I

must re-emphasize, however, my strong disagreement with the Ayotte

majority's conclusion that statutes such as those of New Hampshire

and Maine regulate conduct, rather than constitutionally protected

speech. The purpose of both laws is to restrict truthful – but,

in the States' view, undesirable – messages communicated by

pharmaceutical detailers to prescribing health care professionals.

The State of Maine admits that restricting such speech is precisely

its objective. Cf. Sorrell, 631 F. Supp. 2d at 446 ("Plainly, the

whole point of [Vermont's statute] is to control detailers'

commercial message to prescribers."). The laws achieve this

purpose by regulating the transfer of factual information. It

cannot reasonably be argued that these laws, with this ultimate

purpose, do not constitute restrictions on speech. See Ayotte, 550

F.3d at 81-82 (Lipez, J., concurring and dissenting) (citing

cases); Sorrell, 631 F. Supp. 2d at 446 ("The mere fact that

[Vermont's similar provision] regulates protected speech indirectly

does not sweep it from the First Amendment's purview."); Laurence

-55-

H. Tribe, Legal Backgrounder, The Fatal First Amendment Flaw in

Prescription Restraint Statutes (Wash. Leg. Found., Washington,

D . C . ) , D e c . 1 1 , 2 0 0 9 , a v a i l a b l e a t

http://www.wlf.org/publishing/publication_detail.asp?id=2125

(noting that the Supreme Court has "recognized that obstructing

access to the informational building blocks of speech is every bit

as pernicious an abuse of governmental power over the free flow of

information and ideas as is restricting the resulting speech

itself").

In reaching its conclusion in Ayotte that laws such as

these are "outside the ambit of the First Amendment," 550 F.3d at

52, the majority equated transfers of prescriber-identifiable

information with the limited categories of speech, such as

obscenity and fighting words, that lie "outside the compass of the

Free Speech Clause by virtue of longstanding tradition." Id. at

51-52. In making that comparison, the majority repeatedly

discounted the value of the expression that it acknowledged the New

Hampshire statute might regulate, describing such "putative speech"

as "items of nugatory informational value" and "of scant societal

value." Id. at 52.

However, in a recent decision considering a challenge to

a law criminalizing depictions of animal cruelty, the Supreme Court

firmly rejected the notion that the First Amendment's guarantee of

free speech "extend[s] only to categories of speech that survive an

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ad hoc balancing of relative social costs and benefits." Stevens,

130 S. Ct. at 1585. The Court explained that the exclusion of

categories of speech from the protection of the First Amendment has

occurred only in "special case[s]." Id. at 1586; id. at 1584

(listing the "few limited areas" where "the First Amendment has

permitted restrictions upon the content of speech" (quotation marks

and citation omitted)). Although observing that other categories

of speech may yet be identified as unprotected based on historical

practice, the Court stated that its prior decisions "cannot be

taken as establishing a freewheeling authority to declare new

categories of speech outside the scope of the First Amendment."

Id. at 1586.

These prescriber-information cases involve the right to

disseminate truthful information – a classic form of protectible

speech activity, even when done for a fee – and the right to use

that information in crafting a marketing message. Stevens confirms

that such speech may not be excluded from First Amendment

protection "on the basis that [it] is not worth it," 130 S. Ct. at

1585, and labeling speech as conduct does not make that exclusion

any more permissible.

Hence, while Ayotte governs the First Amendment analysis

in this case, I adhere to my view that what is at stake is

protectible speech, not conduct. The relevant First Amendment

question is thus whether Maine, like New Hampshire, has adequately

-57-

justified the limited restraint on commercial speech imposed by its

statute. Here, as in Ayotte, I conclude that the State has done

so.

Maine asserts three "compelling state interests" in

support of section 1711-E(2-A): "to improve public health, to limit

annual increases in the cost of health care and to protect the

privacy of patients and prescribers" in the State's health care

system. Me. Rev. Stat. Ann. tit. 22, § 1711-E(1-B). Although I

agree that these interests are substantial in theory, I doubt that

the record supports the State's contention that the challenged

statute in fact advances all of them. I am particularly skeptical

of the privacy interest.

The Maine law neither prohibits the practice of

pharmaceutical detailing nor prevents the widespread use of any

prescriber's prescribing histories. See Rowe, 532 F. Supp. 2d at

170 ("The Attorney General's expert [prescriber] witnesses

acknowledged that insurance companies, governmental agencies,

quality assurance committees, utilization reviewers, and others

have the right and responsibility to assess their prescribing

patterns."); id. at 173 ("[T]he new Law does not prevent the

pharmacies from transferring exactly the same information to the

PDIIs, so long as the information is not ultimately used for

marketing."). Detailers may continue to devise marketing

strategies based on the prescribing patterns of prescribers who do

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not choose to bar the marketing use of their information, meaning

that the one-on-one meeting with a prescriber who has invoked the

law's protection may include references to the histories of

colleagues within the same town or even the same practice. See id.

at 171.

Given the wide, permissible dissemination of the

prescribing information, and the continued allowance of targeted

one-on-one detailing, prescriber privacy does not appear to be

meaningfully advanced by this statute. Accord Rowe, 532 F. Supp.

2d at 173 ("The Law only marginally advances the governmental

interest in prescriber privacy."). I therefore disagree with the

majority's analysis of the State's "interest in preventing its

prescribers from being subjected to unwanted solicitations by

detailers in Maine on the basis of their prescribing histories."

The statute does not protect a "right to be let alone"; it merely

protects prescribers who consent to interactions with detailers

from exposure to one type of message. The prescribers may have

particular distaste for sales pitches based on their own

prescribing histories, but that discomfort – whether or not

properly labeled an issue of "privacy" – seems inadequate to

justify a content-based restriction on truthful speech of public

concern. See Rowe, 532 F. Supp. 2d at 170 ("Prescribers'

prescribing patterns are . . . a matter of public concern.").

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In any event, the State's brief gives short shrift to

both the privacy and public health interests, and I find it

unnecessary to closely examine the record on those two interests

because the State's substantial interest in reducing health care

costs in Maine is sufficient to justify the statute within the

commercial speech framework. Cf. Ayotte, 550 F.3d 88-96; Sorrell,

631 F. Supp. 2d at 449-454 (finding that Vermont's statute advances

the State's interests in both cost containment and protecting

public health). Relying on evidence similar to that introduced in

Ayotte, the State argues that detailing is "significantly more

successful when detailers use prescriber-identifiable data," and

that reduced access to physicians' prescribing histories will

reduce the likelihood that prescribers in Maine will prescribe

"unnecessary and more expensive brand-name drugs." I will not

rehearse in detail the nature of the evidence presented on this

issue at the Maine legislative hearings or before the district

court. It suffices to say that the record "establishes a plausible

cause-and-effect relationship between targeted detailing and higher

drug prices," Ayotte, 550 F.3d at 93, and that "the Attorney

General has [thus] sufficiently demonstrated that the State's

interest in cost-containment would be furthered 'to a material

degree' by the limitation on speech it seeks to achieve through

[section 1711-E(2-A)]," id. at 94.

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To satisfy the First Amendment, the statute also must

meet the narrow tailoring prong of the Central Hudson inquiry. See

Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S.

557, 566 (1980). Without the benefit of our decision in Ayotte,

the district court concluded that the Maine law "substantially

fails" the narrow tailoring requirement. Rowe, 532 F. Supp. 2d at

176. That judgment is wrong largely for the same reasons that it

was wrong in Ayotte.

In concluding that the law is more extensive than

necessary to serve the State's interest in decreasing the influence

of drug company representatives, the district court emphasized that

the State did not address the concern that detailers

"inappropriately influenc[e] Maine prescribers by showering them

with gifts in implicit exchange for prescriptions." Id. It also

pointed out that prescribers are "[t]rained as professionals" "to

perform a sophisticated and critical public health function." Id.

at 177. It stated that these trained professionals "have access to

a broad range of sources to evaluate whether to prescribe a drug

for a particular patient." Id. Therefore, the law unnecessarily

protects them "from being influenced by their own practice

patterns." Id. Specifically on the cost issue, the district court

observed that "some branded drugs end up being more cost effective

to the system as a whole than their generic or branded

counterparts." Id. at 178. In that sense, the court stated, the

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Maine law fails to "discriminate between beneficial detailing and

harmful detailing." Id. (quotation marks and citation omitted).

The court thus concluded that "ban[ning] truthful information about

opt-out prescribers' prescription patterns is to overreach and

restrict more speech than is necessary to address the problem of

harmful detailing." Id.

The district court's narrow tailoring assessment does not

adequately take into account the premise from which it must

proceed, i.e., that the State has shown that restricting the use of

prescriber-identifiable data advances at least one of its asserted

interests – controlling the spiraling cost of prescription drugs.

The court seems to assume that the alternatives it describes will

be just as effective in advancing that goal.

As I have explained, the State's evidence in both Ayotte

and here supports the view that, despite the expertise of medical

professionals, detailers are able to influence prescribing

decisions. I also explained in Ayotte why the State could properly

conclude that alternative methods for achieving its cost-

containment objective that would not burden speech, including

restricting courtesy samples and other gifts, were not equivalent.

As I noted there, "[t]he samples and gifts are merely a preparatory

step in the marketing process; while they may increase the

prescribers' susceptibility to the sales pitch, the State

reasonably concluded that it is the sales pitch itself that has the

Moreover, Dr. Jerry Avorn, who also served as an expert in39

this case, testified in Ayotte that other approaches had been tried"nationally in terms of trying to restrict the freebies, trying toprovide doctors with other means of learning, requiring thatdoctors take continuing ed courses," but that these strategies didnot eliminate "this massive distortion of what doctors areprescribing and what the State, and its citizens, are paying fordrugs because of the very heavily and very effective promotionalstrategies that are going on out there." 500 F.3d at 99.

I described in Ayotte some of the ways in which such40

messages would continue to reach prescribers:

News reports, for example, would highlight trulygroundbreaking new therapies in a timely way and, indeed,pharmaceutical detailers with knowledge of physicians'medical specialties presumably would not need access toprescribing histories to effectively promote suchinnovations. Early adopters could be expected to respondquickly with an interest in trying the new medications –effectively identifying themselves to the salesrepresentatives. In addition, . . . the statute does notbar drug companies from alerting prescribers to newlydiscovered problems with their medications.

550 F.3d at 95 (footnotes omitted). Doctors also testified thatthey learned about new drugs from medical literature, conferences,and colleagues. Id. at 95 n.64

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most troubling effect on the prescribers' drug choice – and is most

urgently in need of regulation." 550 F.3d at 99.39

The fact that detailing at times has beneficial effects

does not undermine the State's conclusion that, on balance, its

harms outweigh its benefits – particularly where the State

reasonably could find that the benefits of the messages about

prescription drugs that are disseminated by detailers are "largely

achievable in other ways." 550 F.3d at 95-96 ; see also Rowe, 53240

F. Supp. 2d at 177. Notably, the State's restriction on speech is

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significantly more restrained than other marketing or advertising

bans that have been considered by the Supreme Court. See Ayotte,

550 F.3d at 97 (citing cases involving more comprehensive

restrictions). As I described in Ayotte, the private setting of

the targeted messages also is relevant to the narrow tailoring

inquiry:

This case differs from those in which theCourt has rejected advertising bans thatrestrict the exchange of ideas in the"commercial marketplace." The [Act] neither"protects" the public from information aboutdrugs nor prevents truthful advocacy bypharmaceutical representatives. Instead, itprevents sales representatives from craftingpersonal marketing messages on the basis ofdata that credible evidence indicates has beenused to unduly influence prescribing choices.The Supreme Court on multiple occasions hasreviewed regulation of such directsolicitations, upholding restrictions wherethe context raised concerns about the impactof the marketing on the recipient.

550 F.3d at 100.

Indeed, the narrow tailoring element of the Central

Hudson test is arguably more easily satisfied here than in Ayotte

because the statute bars the marketing use of prescribing histories

only for prescribers who affirmatively choose not to have their

data used for marketing purposes – narrowing the impact on

protected speech. Although the State's cost-containment objective

would have modest success, at best, if few Maine prescribers choose

to restrict the use of their prescribing data, the restriction on

protected speech also would be modest in that situation. I see no

The district court noted that, because the Maine statute41

gives prescribers the option to allow use of their information,the pharmaceutical companies might provide incentives toprescribers in an attempt to persuade them not to opt out –creating an even more troubling relationship between prescribersand drug manufacturers. Rowe, 532 F. Supp. 2d at 174 n.31; id. at176 n.35. In my view, such a scenario is too speculative to factorinto the analysis.

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constitutional barrier to the State's judgment that restricting the

use of prescriber-identifiable data in the detailing messages of

only some of its prescribers would be beneficial.41

In sum, the considerations I addressed in Ayotte to

evaluate "'whether the extent of the restriction on protected

speech is in reasonable proportion to the interest served,'" 550

F.3d at 96 (quoting Edenfield v. Fane, 507 U.S. 761, 767 (1993)),

apply here as well: "[t]he inadequacy of alternatives to satisfy

the State's interests, the context of private communications, and

the limited impact on the message sought to be disseminated." 550

F.3d at 98. My review of these factors leads me to the same

conclusion: the State "has established a 'reasonable fit' between

its abridgement of speech and its . . . goal." Id. at 98

(quotation marks and citation omitted); see also Sorell, 631 F.

Supp. 2d at 455 (finding the Vermont statute to be "in reasonable

proportion to the State's interests").

Hence, like New Hampshire, Maine has met its burden to

justify the limited restraint on commercial speech imposed by

section 1711-E(2-A).

The New Hampshire Attorney General urged the court to read42

the act to "'relate only to activity that takes placedomestically,'" and the panel majority adopted that view despiterecognizing that, so construed, the law "may not accomplish verymuch." Ayotte, 550 F.3d at 63, 64.

Although the Attorney General at oral argument attempted43

to avoid committing to any specific extraterritorial reach for thestatute, I agree with the majority that "[t]he text of the statuteby its terms shows section 1711-E(2-A) was intended to apply toplaintiffs' out of state use or sale of opted-in Maine prescribers'identifying data."

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III. The Commerce Clause

This case confirms the view I expressed in Ayotte that

the plaintiffs' Commerce Clause challenge raised a serious issue

that should not have been addressed in that case on the basis of

the limited record and the parties' cursory briefing. Maine

distances itself from the nonsensical construction of the New

Hampshire statute that was advanced by the New Hampshire Attorney

General and accepted by the Ayotte majority, admitting that its42

statute inevitably reaches out of state to regulate sales of data

about prescriptions written in Maine. Indeed, the activity

restricted by the Maine statute, logically construed, occurs almost

entirely beyond the State's borders.43

A. The Activities Regulated by the Statute

Understanding the sequence of events implicated by

section 1711-E(2-A) is crucial to understanding the statute's legal

status. To begin with the end, the statute is designed to prevent

pharmaceutical detailers working in Maine from using information

The statute also prohibits licensing or exchanging the44

information for value. For the sake of simplicity, I will referprimarily to the prohibitions on the sale or transfer of the data.

The record indicates that, other than the data from one45

small supplier in Maine, the prescriber-identifiable informationobtained by the plaintiffs is transferred in the ordinary course ofbusiness from retail stores located in Maine to the pharmacychains' out-of-state headquarters.

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about the prescribing habits of Maine prescribers to present

targeted, and therefore more persuasive, sales pitches to those

prescribers. The statute does not, however, regulate the

detailers' interactions with the prescribers. Instead, the State

seeks to achieve its objective indirectly by, in effect, placing a

red flag on information about prescriptions written by Maine

prescribers who opt into the statute's protection. The red-flagged

information may not be used, sold or transferred "for any marketing

purpose" by pharmacies, insurers and other entities that acquire it

in the course of their business.44

In practical effect, that prohibition rarely limits any

commercial transactions in Maine. This is so because local Maine

pharmacies routinely transfer their prescription information

electronically to their out-of-state headquarters. Although the45

red flag is attached to the information when those transfers are

made, the statutory prohibition does not affect this first movement

of the data because it is not "for any marketing purpose." Most

prescriber-identifiable data leaves the State in this permissible

manner. The data is next transferred from the out-of-state

An IMS senior vice president testified that the company46

contracts with Rite Aid at its headquarters in Pennsylvania andwith CVS at its headquarters in Rhode Island. IMS is based inPlymouth Meeting, Pennsylvania.

Drug companies also have non-marketing uses for prescriber-47

identified data, including determining the need for new drugs andimplementing prescription recall programs. Ayotte, 550 F.3d at 74n.29. Still, at oral argument, plaintiffs' counsel stated that"[n]inety-five percent of what we do in selling to a pharmaceuticalmanufacturer is so that it can use the information for marketingand detail."

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pharmacy headquarters to the data mining companies – the plaintiffs

in this case – who also are located outside of Maine. The red46

flag imposes a significant restriction on those out-of-state

transactions. Although data miners use prescription information

for other reasons, including to generate reports for government and

other nonprofit recipients, the most lucrative aspect of their

business is to aggregate the information into reports that can be

sold to pharmaceutical companies for use in marketing.47

Hence, the pharmacies and data miners, although not

themselves using the prescriber-identifiable data to market drugs,

presumably must impose a contractual obligation on their customers

not to use the information for that purpose in order to fulfill

their obligations under section 1711-E(2-A). See Rowe, 532 F.

Supp. 2d at 169 n.18 ("[T]he PDIIs are assigned the responsibility

to limit the pharmaceutical companies' use of the opt-out

prescriber data."). How the State would enforce the statute if a

pharmaceutical manufacturer does not abide by such a contract with

The district court described the "burden on pharmacies and48

PDIIs to police their customers" as follows:

They can still sell the opt-out information, but theycannot do so if their customers, the pharmaceuticalcompanies, are going to use the information for a purposethat the Law prohibits. If the PDIIs successfully policetheir contracts with the pharmaceutical companies, as theLaw contemplates, the pharmaceutical companies will notbe able to include opt-out prescriber information inmarketing their products. If they do not, then they, notthe pharmaceutical companies, are subject to sanction.

532 F. Supp. 2d at 169.

The State argues that the record contains no evidence about49

the transactions between the plaintiff data miners and the drugmanufacturers. IMS, however, asserts in its brief that none of itssubscribers are located in Maine, and it cites the testimony ofHossam Sadek, a senior vice president of the company, who statedthat he knew of no IMS customers in the State.

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a data miner is unclear. Perhaps the data miners would be deemed

liable for failing to enforce the obligation unless they took

action against the offending drug company; such action might

include a refusal to continue selling the information to the

company.48

Whatever the specific mechanism for enforcement of the

statute's prohibition, the statute's objective is to prevent the

use of any prescriber-identifiable data obtained by the drug

companies in sales pitches by the detailers in Maine who are the

statute's real target. As my description of the process reveals,49

however, achieving that objective involves raising the red flag in

transactions that almost all occur beyond Maine's borders. Nearly

all of the transfers between the information possessors – the

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pharmacies and data miners – and the information recipients – the

data miners and pharmaceutical companies – are made out of state.

So too are any contractual promises by the recipients to abide by

the statute's limitation.

The plaintiffs complain that this significant

extraterritorial effect is impermissible under the dormant Commerce

Clause. The State, however, maintains that the statute has only a

"spillover effect" beyond its borders, and it argues that the law

applies only to "entities either located in Maine or having nexus

with Maine," i.e., those sufficiently connected to the State to

meet the requirements for personal jurisdiction. The State asserts

that it is "irrelevant" that the main computers of the large retail

pharmacy chains are located outside Maine because Maine is the

source of the restricted information, and the electronic

prescription data is initially entered into in-state computers.

The State further emphasizes that the prescriptions are written by

prescribers licensed by Maine and filled almost exclusively by

State-licensed pharmacies, giving Maine a substantial interest in

governing the dissemination and use of the prescription data.

The difficulty of evaluating the parties' competing

depictions of section 1711-E(2-A) begins with the choice of an

appropriate framework for analysis.

Price controls that favor in-state businesses, assessments50

that function as protective tariffs, and regulations that cap in-state prices for goods produced out of state are classic examplesof measures that run afoul of this aspect of the dormant CommerceClause. See, e.g., Pharm. Research & Mfrs. of Am. v. Walsh, 538U.S. 644, 669-70 (2003); Or. Waste Sys., Inc. v. Dep't of Envtl.Quality, 511 U.S. 93, 99 (1994); Healy v. Beer Inst., Inc., 491U.S. 324, 336 (1989).

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B. Identifying the Correct Analytical Approach

The Supreme Court has articulated various "protocol[s]

for dormant Commerce Clause analysis," Dep't of Revenue of Ky. v.

Davis, 553 U.S. 328, 338 (2008), none of which seems fully apt

here. This is plainly not an instance of discriminatory purpose or

treatment in which the statute should be deemed per se invalid

because it favors in-state over out-of-state interests. See, e.g.,

Alliance of Auto. Mfrs. v. Gwadowsky, 430 F.3d 30, 35-36 (1st Cir.

2005) (noting that the "core purpose" of the dormant Commerce

Clause is "to prevent states and their political subdivisions from

promulgating protectionist policies" (quotation marks and citation

omitted)). The law imposes the same burden on every competitor,

and out-of-state entities would gain no advantage by relocating to

Maine.50

Plaintiffs, unsurprisingly, have relied primarily on the

extraterritoriality doctrine, and the proposition that a statute

may be deemed per se invalid if it "directly controls commerce

occurring wholly outside the boundaries of a State." Healy v. Beer

Inst., Inc. 491 U.S. 324, 336 (1989); see also Wine & Spirits

The Court in Pike held that, when a statute regulates51

evenhandedly to effectuate a legitimate local purpose, and has onlyincidental effects on interstate commerce, "it will be upheldunless the burden imposed on such commerce is clearly excessive inrelation to the putative local benefits." 397 U.S. at 142.

I disagree with the majority's assertion that the plaintiffs52

have waived any Pike balancing argument. Given the similarity ofthe inquiries under the different strands of the dormant CommerceClause, I see no reason to disregard the argument here.

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Retailers, Inc. v. Rhode Island ["Wine & Spirits II"], 481 F.3d 1,

15 (1st Cir. 2007); Pharm. Research & Mfrs. of Am. v. Concannon

["PhRMA"], 249 F.3d 66, 79-80 (1st Cir. 2001), aff'd sub nom.

Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644 (2003). Such

laws may subject activities to more than one state's regulations,

leading to the possibility of conflicting obligations. See, e.g.,

Healy, 491 U.S. at 336-37; CTS Corp. v. Dynamics Corp. of Am., 481

U.S. 69, 88-89 (1987); Peter C. Felmly, Comment, Beyond the Reach

of States: The Dormant Commerce Clause, Extraterritorial State

Regulation, and the Concerns of Federalism, 55 Me. L. Rev. 467, 509

(2003) (observing that the extraterritoriality "principle ensures

that a state will not overstep its bounds and unreasonably trample

upon the authority of another sovereign"). Plaintiffs also invoke

the so-called Pike balancing test, which is applied to laws that

regulate evenhandedly and have only "incidental" effects on

interstate commerce. See Pike v. Bruce Church, Inc., 397 U.S. 137,

142 (1970); see also United Haulers Ass'n, Inc. v. Oneida-Herkimer51

Solid Waste Mgmt. Auth., 550 U.S. 330, 346 (2007).52

The pursuit of such consistency is a feature of the most53

prominent Supreme Court extraterritoriality precedents. In Healy,491 U.S. at 335, the challenged Connecticut statute expresslyrequired out-of-state shippers to affirm that their Connecticutprices were no higher than the prices being charged in borderingstates, and the New York statute at issue in Brown-FormanDistillers Corp. v. New York State Liquor Authority, 476 U.S. 573,579 (1986), required liquor producers and distillers doing businessin the State to affirm comparable in-state and out-of-statepricing. In Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935),the Court struck down the New York Milk Control Act, whichprescribed minimum prices for milk that had the effect of settingout-of-state milk prices. Id. at 524. In line with those cases,the Seventh Circuit recently struck down an Indiana law thatsubjected out-of-state loans entered into by Indiana residents tothe requirements of Indiana's consumer law if the out-of-statecreditor had advertised or solicited sales in Indiana. MidwestTitle Loans, Inc. v. Mills, 593 F.3d 660, 662, 667-68 (7th Cir.2010).

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Neither of these latter alternatives is a good fit for

the present circumstances. The per se extraterritoriality analysis

may appear literally applicable, given that the statute's red flag

has a direct impact almost exclusively on out-of-state commerce.

Yet, as I observed in Ayotte, "whether extraterritoriality is

impermissible in every instance, or whether it transgresses the

dormant Commerce Clause only when the challenged statute is

discriminatory or protectionist in nature, appears to be [a]

relevant consideration." 550 F.3d at 105 (citing Felmly, supra, at

491). The Maine law does not by its terms impose restraints on

non-domestic businesses, and the imbalance between in-state and

out-of-state effect is a matter of happenstance not design. The

statute does not seek to achieve conformity between in-state and

out-of-state commerce. Additionally, there is no risk of conflict53

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with other states' regimes. No other State has a stake in the use

of prescriber-identifiable data in Maine or any obvious interest in

the use of Maine prescriber information in their own locales.

Indeed, it is arguable that, despite the statute's impact

on commercial transactions that occur almost entirely out of state,

the commerce it controls is not "wholly outside [Maine's]

boundaries." Healy, 491 U.S. at 336. The subject matter of the

law is data that both originates in Maine and is intended for

marketing use in Maine. Maine's aim is to regulate on a matter of

public welfare only within Maine. Cf. Midwest Title Loans, Inc. v.

Mills, 593 F.3d 660, 667-68 (7th Cir. 2010) (invalidating Indiana

statute that sought to protect Indiana residents from predatory

lending practices by businesses located in other states). On the

other hand, it is difficult to characterize the statute's effect on

out-of-state commerce as "incidental" when its prohibition in fact

has its primary impact outside the State. See, e.g., Healy, 491

U.S. at 336 ("The critical inquiry is whether the practical effect

of the regulation is to control conduct beyond the boundaries of

the State.").

The various labels ordinarily are invoked because they

are associated with different levels of scrutiny. We have observed

that a statute that regulates evenhandedly "engenders a lower level

of scrutiny," Wine and Spirits II, 481 U.S. at 11 (quotation marks

and citation omitted), while "[a] statute is per se invalid if it

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regulates commerce wholly outside the state's borders," id. at 15.

Identifying the appropriate label should not distract us, however,

or bog us down at the threshold of analysis. Despite the different

protocols for dormant Commerce Clause inquiry, the Supreme Court

has observed that "there is no clear line separating" the various

types of state regulation and that the same "critical

consideration" applies to each category: "the overall effect of the

statute on both local and interstate activity." Brown-Forman

Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 579

(1986) (referring to regulations that are "virtually per se invalid

under the Commerce Clause, and the category subject to the Pike v.

Bruce Church balancing approach"); see also Healy, 491 U.S. at 337

n.14 (noting the same "critical consideration" in determining

"whether the extraterritorial reach of a statute violates the

Commerce Clause"); Am. Booksellers Found. v. Dean, 342 F.3d 96, 102

(2d Cir. 2003).

This dual concern is an inevitable byproduct of our

system of federalism. The Court has often remarked in its dormant

Commerce Clause cases that States "retain authority under their

general police powers to regulate matters of legitimate local

concern, even though interstate commerce may be affected." Maine

v. Taylor, 477 U.S. 131, 138 (1986) (quotation marks and citation

omitted); see also, e.g., Davis, 553 U.S. at 338; cf. Garcia v. San

Antonio Metro. Transit Auth., 469 U.S. 528, 546 (1985). Hence, in

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reviewing a statute challenged under the dormant Commerce Clause,

we are always guided by "the Constitution's special concern both

with the maintenance of a national economic union unfettered by

state-imposed limitations on interstate commerce and with the

autonomy of the individual States within their respective spheres."

Healy, 491 U.S. at 335-36 (footnote omitted).

Indeed, even the "rigorous form of review" applicable to

discriminatory legislation allows exemption for a statute that

"furthers a legitimate local objective that cannot be served by

reasonable non-discriminatory means." Wine and Spirits II, 481

F.3d at 11. Local needs also must qualify the "near-fatal rule of

per se invalidity" for statutes that regulate extraterritorially.

See Felmy, supra, at 492; id. at 488 (observing that "[o]ne may

infer" from language in CTS Corp., 481 U.S. at 93, that "where a

state has a significant interest in regulating a particular aspect

of interstate commerce, it may do so, regardless of the

extraterritorial effect of the legislation, if the regulation also

affects a substantial number of in-state residents").

I thus see the most relevant and appropriate question as

simply whether Maine's interests are sufficiently weighty to

justify any burdens its law imposes on interstate commerce.

Whatever the label and however we describe the level of scrutiny,

the outcome here is the same.

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C. Assessing the Local Interest and the Burden on InterstateCommerce

As discussed in Section II above, I agree that the State

has a substantial interest in reducing the cost of prescription

drugs for its residents and that the State could reasonably

conclude that section 1711-E(2-A) advances that interest by

regulating the dissemination of information revealing the

prescribing histories of Maine's licensed health care providers.

Cf. Ayotte, 550 F.3d at 94-95. The statute's importance to the

State is no different in the context of a Commerce Clause inquiry

than in the First Amendment setting.

The other side of the balance is not the same, however.

The conclusion that the statute is "narrowly tailored" under the

Central Hudson test for commercial speech, see 447 U.S. at 566,

does not tell us whether the provision impermissibly burdens

interstate commerce. As I have described, the statute does in fact

regulate specific activities that occur mostly out of state. The

impact on the plaintiffs is not merely "spillover" from a

prohibition directed at others; they are among the categories of

entities – PDIIs – affected directly by the statute.

Moreover, the statute's impact on PDIIs is potentially

enormous. Sales of prescriber-identifiable data are the bread-and-

butter of the medical data mining business, producing $1.75 billion

in revenue for plaintiff IMS Health alone in 2005. Although only

three states have thus far enacted laws designed to limit

The fact that only 259 of Maine's 7,500 prescribers opted54

into the statute's confidentiality protection during the period inwhich it has been suspended by the preliminary injunction tells uslittle about the law's likely impact. More activity presumablywill occur once the injunction is lifted.

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detailers' access to prescribers' identifying information, they are

at the front of a wave of similar legislation. See Rowe, 532 F.

Supp. 2d at 180 n.41 (noting testimony that seventeen to twenty

other states were considering similar laws); Heesters, supra, at

791 (stating that "numerous other states have [bills] that

similarly restrict the sale of prescription drug data that are

currently pending in legislative committees").

Hence, a conclusion that section 1711-E(2-A) comports

with the dormant Commerce Clause could eventually lead to

elimination of any market for prescriber-identifiable data, which

the plaintiffs have argued would jeopardize the viability of their

businesses. See Ayotte, 550 F.3d at 95 n.66 ("Plaintiffs theorize

that the pharmaceutical companies would be unwilling to pay

substantial sums for information they cannot use in marketing,

eliminating the data miners' biggest customers – thereby cutting

off the commercial funding that subsidizes the research and other

non-commercial uses of the data."). Plaintiff IMS asserts that54

it will cost hundreds of thousands of dollars for it to adjust its

systems to comply with the statute's restrictions; plaintiff Source

Healthcare estimated that it would spend 10,000 employee hours to

comply with Maine's and Vermont's laws.

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The "possible effects on the profits of the individual

manufacturers" is not, however, the concern of the dormant Commerce

Clause. PhRMA, 249 F.3d at 84. Our court previously has observed

that "the Commerce Clause . . . 'protects the interstate market,

not particular interstate firms, from prohibitive or burdensome

regulations.'" Pharm. Care Mgmt. Ass'n v. Rowe, 429 F.3d 294, 313

(1st Cir. 2005) (quoting Exxon Corp. v. Gov. of Md., 437 U.S. 117,

127-28 (1978)); see also PhRMA, 249 F.3d at 84 ("[T]he fact that a

law may have devastating economic consequences on a particular

interstate firm is not sufficient to rise to a Commerce Clause

burden." (quotation marks and citations omitted)). Even if the

statute meant the demise of the data-mining industry as a whole –

an outcome I doubt, see infra note 22 – any ill-effects from that

result would "relate[] to the wisdom of the statute, not to its

burden on commerce." Exxon Corp., 437 U.S. at 128. The point is

perhaps more easily understood in a different context. If, for

example, every state decided to ban the use of firecrackers because

of the risk of injury, the dormant Commerce Clause would not trump

the legislative safety concerns and insulate the fireworks industry

from extinction.

Neither national uniformity nor any of the other

traditional concerns underlying the dormant Commerce Clause are

implicated here. The law does not "erect barriers against

interstate trade," Lewis v. BT. Inv. Managers, Inc., 447 U.S. 27,

The "subsidiary" nature of the out-of-state transactions is,55

of course, a function of the statute's purpose to restrict speechin Maine. Although that in-state speech objective strengthens theState's Commerce Clause position, the indirect regulatory strategy– as I have explained – creates the First Amendment-Commerce Clausedance and unnecessarily complicates the constitutional analysis.

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35 (1980), and its target is not "interstate commerce" as such.

Rather, the transactions governed by the statute are restricted

only because they are subsidiary steps in the regulation of in-

state activity. Indeed, the law's effect on individual businesses55

would be no different if every PDII were based in Maine. Nor does

Maine's decision to restrict the use of certain prescriber-

identifiable data make similar legislation more or less appropriate

or necessary in other states. There is nothing in Maine's statute

that affects other states' choices about whether, or how, to

regulate prescriber-identifiable data within their own borders. As

the Supreme Court observed in Exxon Corp., "[t]he evil that

appellants perceive in this litigation is not that the several

States will enact differing regulations, but rather that they will

all conclude that [similar] provisions are warranted." 437 U.S. at

128. However, "[i]n the absence of a relevant congressional

declaration of policy, or a showing of a specific discrimination

against, or burdening of, interstate commerce, we cannot conclude

that the States are without power to regulate in this area." Id.

at 128-29.

The actual impact on the plaintiffs of legislation56

regulating the use of prescriber-identifiable data remains to beseen. As the district court noted, the law "does not prevent thepharmaceutical companies from marketing their products and thecompanies may resort to more general, less tailored marketing."Rowe, 532 F. Supp. 2d at 174. It thus may be that the demand foraggregated data about prescribing trends will change, but not dryup. For example, the statute appears to permit detailers to useaggregated data based on specialities or zip codes. See Ayotte,550 F.3d at 95 n.66. Moreover, if empirical data gathered in thefuture on the statute's impact shows that less particularized, lessefficient detailing is negating the cost savings Maine hopes toachieve, the State may be persuaded to change its approach to theproblem. Cf. Clover Leaf Creamery Co., 449 U.S. at 473 n.17 ("Theexistence of major in-state interests adversely affected by [a law]is a powerful safeguard against legislative abuse.").

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Nor do I see a way in which Maine could have promoted its

interest "'with a lesser impact on interstate activities,'"

Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 471 (1981)

(quoting Pike, 397 U.S. at 142) – a factor that is considered in

Pike balancing. See, e.g., U & I Sanitation v. Columbus, 205 F.3d

1063, 1070-71 (8th Cir. 2000). If Maine had regulated only in-

state activity – directly barring detailers working in Maine from

using the opted-out prescribers' data in their sales pitches – the

impact on data miners would be the same. In such a regime, the

out-of-state data miners would not be prohibited from selling the

prescriber-identifiable data for marketing purposes, but the

pharmaceutical companies would have no reason to buy it.56

In sum, I conclude that section 1711-E(2-A) survives

dormant Commerce Clause scrutiny even though in practical effect it

regulates activity that occurs primarily beyond Maine's borders.

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The burden on interstate commerce (the reduction in the value of a

particular type of business) is not the kind of burden that raises

constitutional concerns. To the extent that burden is relevant to

the Commerce Clause analysis, it is easily outweighed by the

State's substantial interest in bringing the cost of prescription

drugs – and health care expenses in general – under control. Cf.

Pharm. Care Mgmt. Ass'n, 429 F.3d at 312 (describing a law aimed at

"reduc[ing] the costs of, and increas[ing] the public's access to,

prescription drugs" as "designed to deal with 'one of the serious

problems of our time'").

I therefore agree that the judgment of the district court

should be reversed.

IV. The Focus of Future Litigation

This case has allowed us to put to rest the Commerce

Clause challenge that was not properly teed up in Ayotte. In

addition, in the period between our reviews of New Hampshire's and

Maine's similar statutes, Stevens has reinforced my view that laws

regulating the messages of pharmaceutical detailers restrict

protectible speech, not conduct. Thus, as more of these cases

evolve across the country, the legal argument and factual

development should be framed by the Supreme Court's commercial

speech doctrine under the First Amendment.

That doctrine is the subject of ongoing debate among

commentators and in the courts, including within the Supreme Court.

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Much of the ferment focuses on the narrow tailoring prong of the

Central Hudson inquiry and how close the fit must be in any

commercial speech case between the State's interest and the

challenged restriction on speech. See Greater New Orleans Broad.

Ass'n, Inc. v. United States, 527 U.S. 173, 184 (1999) (recognizing

the advocacy among judges, scholars and others for "a more

straightforward and stringent test for assessing the validity of

government restrictions on commercial speech"); see also Thompson

v. W. States Med. Ctr., 535 U.S. 357, 388 (2002) (Breyer, J.,

dissenting) (chastising the majority for applying the commercial

speech doctrine "too strictly" in finding that a statute

prohibiting the advertising of compounded drugs was not narrowly

tailored); Ayotte, 550 F.3d at 96-97 (discussing "the debate on

Central Hudson's continuing viability"); Elizabeth Spring, Note,

Sales Versus Safety: The Loss of Balance in the Commercial Speech

Standard in Thompson v. Western States Medical Center, 37 U.C.

Davis L. Rev. 1389, 1404 (2004) ("[T]he Court is now applying the

Central Hudson test in a manner approaching strict scrutiny

review.").

In addition, there is a claim by some that these

particular laws should not be assessed as regulations of commercial

speech, with the lesser scrutiny that attends such measures, but

rather as content-based regulations of truthful speech "on matters

of profound public importance." Tribe, supra; see also Rowe, 532

The district court in Sorrell observed that, "[b]y57

definition, the 'Supreme Court's commercial speech doctrine . . .creates a category of speech defined by content but afforded onlyqualified protection.'" 631 F. Supp. 2d at 447-48 (quoting TransUnion Corp. v. FTC, 267 F.3d 1138, 1141-42 (D.C. Cir. 2001)).

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F. Supp. 2d at 167 n.14 (describing as a "thorny question" whether

Maine's content-based regulation should be given intermediate or

strict scrutiny and raising the possibility that "the speech here

is not purely commercial speech and is subject to strict scrutiny"

because it is "a matter of public concern"); cf. Tribe, supra

("Even if the prescription restraint laws were subject to the more

forgiving standard applicable to regulations of purely commercial

speech, however, they would still be unconstitutional because they

violate the core principle that the government may not restrict

even commercial communication merely to block the dissemination of

truth."). Although in Ayotte I found no merit in the argument that

New Hampshire's statute should be analyzed as a content-based

restriction on speech subject to strict scrutiny, see Ayotte, 550

F.3d at 83 n.47; accord Sorrell, 631 F. Supp. 2d at 447-48, the57

contrary view has worthy proponents and undoubtedly deserves close

consideration.

Yet another source of difficulty is the quality of the

record a state legislature must amass to prove that a statute

advances its interest and extends no more broadly than necessary to

achieve its objectives. I concluded in Ayotte that the district

court had held the Attorney General to an overly demanding standard

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of proof. Here, too, the court underestimated the strength of the

State's showing. As I explained in Ayotte, a state legislature's

investigation cannot reasonably be expected to match the exhaustive

investigation Congress conducts in connection with complex federal

legislation. See 550 F.3d at 92-93 (referring to the "'tens of

thousands of pages' of materials" acquired during three years of

Congressional hearings on provisions of the Cable Television

Consumer Protection and Competition Act of 1992).

Although the extent of the required proof may differ, the

question in both federal and state contexts is the same: "whether

the government is able to support its restriction on speech by

'adduc[ing] either empirical support or at least sound reasoning on

behalf of its measure[].'" Id. at 93 (quoting Turner Broad. Sys.,

Inc. v. FCC, 512 U.S. 622, 666 (1994)). A further complexity,

however, is whether "the general principle of legislative

deference" should operate the same way in both settings, despite

differences in the scope of the underlying record. Id. In Turner

Broadcasting, the Supreme Court observed that Congress's findings

were entitled to "deference in part because the institution is far

better equipped than the judiciary to amass and evaluate the vast

amounts of data bearing upon legislative questions." Turner Broad.

Sys., Inc. v. FCC, 520 U.S. 180, 195 (1997) (quotation marks and

citation omitted).

The district court in Vermont also was faced with competing58

arguments about "the nature and amount of deference" that should beafforded to "the predictive judgments and factual findings of theLegislature." Sorrell, 631 F. Supp. 2d at 448-49.

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The district court in this case puzzled over the

appropriate level of deference for the legislature's findings,

noting the subtle "distinction between judicial deference and

judicial respect to a legislature in a First Amendment case." 532

F. Supp. 2d at 178. It noted the Ayotte trial court's conclusion

that the legislature's "predictive judgments" were "entitled to

respect, but not deference, because there was nothing in the record

'to support a conclusion that the legislature had established

expertise in the regulation of prescriber-identifiable data.'" Id.

(quoting IMS Health Inc. v. Ayotte, 490 F. Supp. 2d 163, 177 n.12

(D.N.H. 2007)). Yet the court also cited the Supreme Court's58

statement in Turner Broadcasting that "the 'obligation to exercise

independent judgment when First Amendment rights are implicated is

not a license to reweigh the evidence de novo, or to replace

[legislative] factual predictions with our own.'" Id. at 178-79.

Indeed, the Supreme Court has "permitted litigants to justify

speech restrictions by reference to studies and anecdotes

pertaining to different locales altogether, or even, in a case

applying strict scrutiny, to justify restrictions based solely on

history, consensus, and 'simple common sense.'" Florida Bar v.

Went For It, Inc., 515 U.S. 618, 628 (1995) (citations omitted).

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The legislative records in New Hampshire and Maine were

necessarily limited. Given the novelty of their statutes, neither

State could offer "empirical data showing the extent of the

influence of prescriber-specific information on physicians'

decision-making" or proving the cost-cutting impact of their

provisions. 550 F.3d at 93. Both States, however, adduced

evidence of the impact of detailing generally and presented

anecdotal evidence "strongly indicating that sales pitches based on

specific prescribing patterns have a particularly persuasive impact

on drug choice." Id. at 94; Rowe, 532 F. Supp. 2d at 172. New

Hampshire offered expert evidence in defense of its view that

alternative strategies, less burdensome on speech, would not

suffice. Ayotte, 550 F.2d at 100. At this point in time, such

evidence was sufficient in each case to "establish[] a factual

basis justifying the initiative." Id. at 94. Equivalent evidence

may not be enough to support the adoption of similar legislation in

other states, however, if more extensive quantifiable data becomes

available. Cf. Ayotte, 550 F.3d at 93-94 ("[I]t will be important

going forward for the State to try to measure the cost-containment

effect of its initiative, and it is possible that this ongoing

assessment will indicate that the measure is not as effective as

the State had hoped.").

Without a doubt, the States must have flexibility to

experiment with measures that will help them address the serious

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problem of spiraling drug costs. At the same time, the restriction

of speech based on its content is a serious constitutional matter.

The tension between those principles in laws such as those enacted

in New Hampshire, Maine and Vermont presents a challenge to the

Supreme Court's commercial speech jurisprudence that warrants the

Court's attention and guidance.